ECON 200 Chapter Notes - Chapter 19: Human Capital, International Trade, Efficiency Wage
11 Mar 2014
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Document Summary
Compensating differential: difference in wages that arises to offset the nonmonetary characteristics of different jobs. Schooling raises workers" wages because makes them more productive. Degrees are a sign of ability- easier for some people to get a degree. Human capital: the accumulation of the investments in people, such as education and on-the-job training. Changes in technology cause changes in demand for skilled and unskilled labor. Computers need skilled workers to work them and replace the unskilled ones. Raise our need for exports with skilled labor and import by unskilled. Natural abilities influence pay (smart, athletic, sociable) Effort (work hard), chance, beauty (reflects customers preferences) Every customer in the market want to enjoy the good supplied by the best. The good is produced with a technology that makes it possible for the best producer to supply every customer at low cost. Min wage laws can bring wages above level of an unregulated market for some.
