Labour Hoarding Refers To

question 79

Multiple Choice

Labour hoarding refers to:

• A)keeping workers in low-wage jobs in order to reduce labour costs.
• B)using less capital in production so that more workers will have jobs.
• C)continuing to employ workers during a recession to ensure they will be available in the recovery.
• D)contractually preventing workers from obtaining jobs with competing firms.

Understand the concept of separating and pooling equilibria in labor and insurance markets.

Analyze how personal preferences and productivity influence worker choices and wages.

Evaluate different scenarios of adverse selection in insurance and labor markets.

Understand the impact of moral hazard in insurance markets.

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Definitions:

External Costs

Costs of economic activities that affect third parties outside the transaction, which are not reflected in market prices.

Tax

A compulsory financial charge or levy imposed by a government on individuals or entities to fund public expenditures.

Negative Externality

Occurs when a decision by an individual or firm results in unwanted negative effects on another party not involved in the decision.

MSC (Marginal Social Cost)

The total cost to society of producing an additional unit of a good or service, including both private costs and any externalities.