EC120 Lecture Notes - Lecture 24: Efficiency Wage, Human Capital, Market Power
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EC120 Full Course Notes
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Ec120 lecture #24: earnings and discrimination & income inequality and poverty. Compensating differentials compensating differential: a difference in wages that arises to offset the non-monetary characteristics of different jobs. Human capital human capital: the accumulation of investments in people, such as education and on- the-job training. Ability, effort, and change, superstar natural ability and many other personal characteristics determine how productive workers are and therefore play a role in determining the wages they earn. Workers who work hard are more productive and earn higher wages chance also plays a role in determining wages. The superstar phenomenon superstars arise in markets that have two characteristics: every customer in the market wants to enjoy the good supplied by the best. 2. producer the good is produced with a technology that makes it possible for the best producer to supply every customer at low cost.
