EC120 Chapter Notes - Chapter 19: Profit Motive, W. M. Keck Observatory, Making Money
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EC120 Full Course Notes
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Supply of labour for easy, fun, and safe jobs > supply of labour for hard, dull and dangerous. Good jobs have lower equilibrium wages than bad jobs. To induce people to have the bad jobs, employers offer higher wages. Compensating differential: difference in wages that arises to offset the nonmonetary characteristics of different jobs. Coal miners are paid more than others with similar levels of education higher wage compensates for dirty/dangerous nature of coal mining, and long term health problems. Workers who work night shift get higher pay than day shifts b/c they have undesirable lifestyle. Professors paid less than lawyers and doctors professors" lower wages compensate them for great intellectual and personal satisfaction their jobs offer. Capital: economy"s stock of equipment and structures (e. g. farmer"s truck, factories) A factor of production that itself has been produced. Human capital: accumulation of investments in people, such as education and on the job training.
