ECON 1 Study Guide - Midterm Guide: Deadweight Loss, Adverse Selection, Discouraged Worker
Document Summary
With adverse selection there is a more chance of picking higher risk people than lower risk people. Adverse selection in labor markets to avoid adverse selection, company offers higher wage, to more likely get someone with is more qualified with higher skills raise wage to get more higher skilled workers. Will cause higher than normal unemployment rate. Actively looking for a job in the last 4 weeks. Structural: change of structure of economy changes causes you to lose your job. Seasonal: depends on the season. (ex: lifeguard in the summer) Discouraged worker: don"t have a job and not looking for a job in the last 4 weeks. Includes part time workers (not counted in unemployment rate)! frictional: in between jobs\2. Deflation: measure of average decrease in price. Disinflation: prices are rising at a lower percentage. How to determine inflation: look at average prices of goods and services bought by a household.
