If needed, review it with an academic advisor and be sure to use your unit allowance wisely. For example, taking too many 1-unit electives your freshman year may leave you in a pinch for necessary classes later in your college career. By having an idea of the classes you will need each year and sticking to a general plan, you'll make the most out of the classes you take and be one step closer to earning your degree. Typically, one unit, or one hour of class, will require two hours of study time.
Consequently, a 3 unit course would require three hours of lectures, discussions, or labs and six hours of independent studying.
A 3 unit course will, therefore, necessitate about nine hours of your time. To be successful in college, choose the amount of units based on your other engagements, such as work and other responsibilities. Many students try to take on as many units as they can, only to find themselves in distress or unable to perform sufficiently in their classes.
It is understandable that sometimes students must finish their degree within a certain amount of time. This may be due to their college's requirements or personal finances. However, when necessary and possible, extending the length of your study could be beneficial to your mental health as well as to your GPA and therefore to your learning and overall college experience. Actively scan device characteristics for identification. Use precise geolocation data. Select personalised content.
However, when you examine the properties of each item, you will often discover how they may or may not actually have assessed the learning outcome you intended— which is a validity issue.
When you change items to correct these problems, it means the item analysis has helped you to improve the likely validity of the test the next time you give it. If you use scantron sheets for grading exams, ask your school whether it can calculate item statistics when it processes the scantrons. If it can, those statistics probably include what you need: the a difficulty indexes for each item, b correlations of each item with total scores for each student on the test, and c the number of students who responded to each distracter.
The item-total correlation is comparable to and more accurate than your discrimination index. If your school has this software, then you won't have to calculate any item statistics, which makes your item analyses faster and easier. It is important that you have calculated the indexes once on your own, however, so that you know what they mean. Output and employment increase. Remember from Unit 7 that as the cost C has fallen, at every point on the isoprofit curve is now at a higher profit level than was the case prior to the decline in wages.
Importantly, it is also steeper than before. The new lower wage isoprofit curve passing through the original point B is now steeper than the demand curve, so the firm can do better by lowering its price and moving down the demand curve, selling more. It will continue doing this until it reaches a point on the demand curve where one of the new darker blue isoprofit curves is tangent to the demand curve. The firm maximizes profits at point X. This process explains how wage and price cutting might lead the economy to move from B back to X.
But real economies do not function so smoothly. The HR department would know that lowering the nominal wages of its employees would not be a simple matter, because it means that the actual monetary amount received by all existing workers would have to be smaller.
As we saw in Unit 6, firms are often reluctant to cut nominal wages because it may reduce worker morale and result in conflict with employees.
For these reasons the HR department might hesitate to impose nominal wage cuts on its workers. For the adjustment from B to X to occur, firms across the economy have to adjust wages and prices downward, and in response, firms and households have to increase their demand for goods and services by enough to restore economy-wide or aggregate demand to its level at point X.
For the individual firm, a fall in price leads to higher sales. But falling prices across the economy can lead to cutbacks in spending, which shift the demand curves facing firms to the left.
Falling prices can lead households to postpone spending, as they hope to get better bargains later. The gap in spending would be exacerbated by such behaviour. Moreover, as wages fall people may spend less, reducing demand. Thus, in the presence of deficient aggregate demand, the usual profit-seeking decisions of firms and the responses of consumers, when added up across the economy, cannot be guaranteed to move the economy from B to the Nash equilibrium at X.
Fortunately, there is another way to get from B back to the Nash equilibrium. The government could adopt policies to increase its own spending and expand the demand facing the firms. In this case, at point B firms would find that they were producing less than the profit-maximizing amount and would employ more people, instead of wanting to reduce wages. Policies to affect the total demand in the economy are considered in Units 13— As before, the economy begins following the fall in economy-wide demand at point B.
Rather than either waiting for a revival in aggregate demand for example, through a recovery in global demand for minerals or waiting for the process of wage and price reductions to spread across the economy, the government can increase the level of aggregate demand. Remember, the isoprofit curves do not shift when the demand curve shifts. The firm moves on to a new higher isoprofit curve if demand rises as a result of higher economy-wide demand following monetary or fiscal policy actions.
One method is for the central bank to make borrowing cheaper by reducing the interest rate. The aim is to provide incentives for people to bring forward some of their spending decisions, particularly on things that are often purchased with borrowed money such as housing and automobiles.
We look closely at this monetary policy in Unit 10 Banks, money and the credit market and in Unit 15 Inflation, unemployment and monetary policy. Other methods are for the government to increase its spending or reduce tax rates. These fiscal policies are the subject of Unit 14 Unemployment and fiscal policy.
We can summarize what we have learned in Figures 9. When aggregate demand in the economy is too low, unemployment is higher than at the Nash equilibrium.
The government or central bank can eliminate this demand-deficient unemployment through fiscal or monetary policy. These policies are likely to be a more rapid way of reducing unemployment compared to solely relying on the combination of downward adjustment of wages and prices by firms throughout the economy and increased demand by households and firms for goods and services.
The adjustment via fiscal or monetary policy is shown in Figure 9. We saw that if an economy has low aggregate demand with high cyclical unemployment, then automatic adjustment back to equilibrium could occur through a process of wage and price cuts. Imagine you are a worker and you see that many workers have lost their jobs while other workers are having their wages cut. So the labour market model is also a model of the distribution of income in a simple economy in which there are just these two classes employers, who are the owners of the firms, and workers , where some of the latter are without work.
As we did in Unit 5, we can construct the Lorenz curve and calculate the Gini coefficient for the economy in this model. Refer back to the Einstein in Unit 5 on the Lorenz curve and to the Einstein at the end of this section, which explain how to calculate the Gini coefficient with different kinds of information about a population.
In the left panel of Figure 9. As you can see, there are 10 unemployed people. Each firm has a single owner. The right-hand panel shows the Lorenz curve for income in this economy. The size of the shaded area measures the extent of inequality, and the Gini coefficient is 0.
To learn how to calculate the Gini coefficient from information like this see the Einstein at the end of this section. The Lorenz curve is made up of three line segments with the beginning point having coordinates of 0, 0 and the endpoint 1, 1. The first kink in the curve occurs when we have counted all the unemployed people. The second is the interior point, whose coordinates are fraction of total number of economically active population, fraction of total output received in wages.
The fraction of output received in wages, called the wage share in total income, s , is:. Therefore the shaded area in the figure—and hence inequality measured by the Gini coefficient—will increase if:. What can change the level of employment and the distribution of income between profits and wages in equilibrium? We start from the equilibrium at A with a Gini coefficient of 0. Suppose that the degree of competition faced by firms is increased.
The markup charged by firms in the market will decrease, and so the price-setting curve will be higher. The new equilibrium is at B.
Stronger competition means that firms have weaker market power: the share going to profits falls, and the share going to wages rises. Inequality falls: the new Gini coefficient is 0. The markup would decrease, and as a result the real wage shown by the price-setting curve would increase, leading to a new equilibrium at point B with a higher wage and a higher level of employment. The share of output going to profits falls, and the share going to wages rises.
In a population of , there are 10 firms, each with a single owner, 80 employed workers, and 10 unemployed workers. The Gini coefficient is 0. In which of the following cases would the Gini coefficient increase, keeping all other factors unchanged?
We now use the figure to derive an equation for the value of the Gini coefficient in terms of the following variables:. We calculate A as 0. Even though the supply of labour must always exceed demand for labour at the labour market equilibrium there is always some involuntary unemployment , the supply of labour is still one of the important determinants of this Nash equilibrium.
To see why this is so, imagine that there is immigration of people looking for employment assume these immigrants are potential employees, as opposed to people who intend to start up a business , or that people who have stayed at home to raise children, or have retired, re-join the labour force. What effect would this have?
This process is true for any point on the wage-setting curve, so it must be true of the entire curve. Therefore, the effect of an increase in labour supply is to shift the wage-setting curve downward. We use an increase in the labour supply due to immigration as an example.
The labour supply curve would shift to the right, as shown in Figure 9. At any level of employment there are now more unemployed workers.
The rise in unemployment to 1. The threat of job loss is greater and firms can secure effort from the workforce at a lower wage. This causes firms to hire more workers, which requires rising wages along the wage-setting curve. The labour market moves from point B to point C. They rise until they reach the price-setting curve, meaning profits are consistent with market competition again. At point C, employment is 4. In the long run, however, the increased profitability of firms leads to expanded employment that eventually if no further changes take place will restore the real wage and return the economy to its initial rate of unemployment.
As a result, incumbent workers are no worse off. Immigrants are likely to be economically better off too—especially if they left their home country because it was difficult to make a living.
Suppose that some of the immigrants to the country decide to set up businesses, rather than become employees. Explain how you expect this to affect the wage-setting curve, the price-setting curve, and the labour market equilibrium.
The current labour market equilibrium is at A. Now consider the case where the total labour supply is increased to million. Based on this information, which of the following statements are correct regarding the adjustment process in the labour market?
The labour market model presented so far is about firms and individual workers. But in many countries labour unions play a big part in how the labour market works.
The resulting contract is between the firm or organization representing employers and the labour union. As you can see from Figure 9.
Jelle Visser. Updated October Where workers are organized into trade unions, the wage is not set by HR but instead is determined through a process of negotiation between union and firm. Although the wage must always be at least as high as the wage indicated by the wage-setting curve for the given level of unemployment, the bargained wage can be above the wage-setting curve.
This and the other determinants of bargaining power depend on the laws and social norms that are in force in an economy. In many countries, for example, it is a serious violation of a social norm among workers to seek employment in a firm whose workers are on strike. A powerful union, however, may not choose to raise the wage even if it has the power to do so. This is because even a very powerful union can only set the wage, and it cannot determine how many people the firm hires.
Too high a wage may squeeze profits sufficiently to lead the firm to close down, or cut back on employment. Unions may choose to restrain their use of bargaining power. If their wage-setting covers a substantial part of the economy, they will take into account the effect of their wage decision on the wages and employment of workers in the economy as a whole. In this case, the employer no longer sets the wage that maximizes profits the point of tangency of the isocost line for effort and the best response curve at point A in Figure 9.
Use the steps in Figure 9. At point A, the employer sets the wage that maximizes profits at the point of tangency of the isocost line and the best response function. If the union sets the wage, it will be higher than that preferred by the employer, and effort levels correspondingly higher …. As shown in the figure, the wage will be higher than that preferred by the employer. Workers will now be working harder, but wages increase by more than productivity, so firms receive less effort for each dollar spent on wages.
It follows that profits will be lower than without the union, that is, on the flatter isocost line passing through C. By translating Figure 9. Looking at the equilibrium where the bargained wage-setting curve intersects with the price-setting curve, the wage is unaffected, but the level of employment is lower. But if we look at the data on union bargaining coverage and unemployment in Figure 9. Austria, with almost all employees covered by union wage bargains, has a lower unemployment rate averaged over — than the US, where fewer than one in five workers are covered by union contracts.
Spain and Poland both had massive unemployment over this period, but union coverage was very high in Spain and very low in Poland. Suppose that over time, the employer and the trade union had developed a constructive working relationship—for example, solving problems that arise in ways that benefit both employees and the owners.
As a result, they might identify more strongly with their firm and experience effort as less of a burden than before, shifting their best response curve in Figure 9. Note that in the example shown, the firm is still worse off than it was in the absence of the union. With the new best response function, there is of course an outcome for a wage-setting firm that is even better than D—where the isocost curve is tangent to it not shown.
However, this is not feasible. At point A, the employer sets the wage that maximizes profits at the point of tangency of the isocost line and the best response curve. We have shown two effects of the presence of a labour union, which we can now represent in the labour market diagram:. The two effects are illustrated in Figure 9. In this figure, we show the case in which the equilibrium level of employment is higher and unemployment lower with the union point Y than without point X.
But it could have worked out the other way around. The bargained wage effect could have been greater than the union voice effect, in which case the effect of unions would have been to reduce employment in the labour market equilibrium. This provides a reason why the data in Figure 9. Unions may also affect the average productivity of labour, which will shift the price-setting curve. If unions foster cooperation with management in solving production problems, average product and the price-setting curve will rise leading to higher wages and less unemployment.
If unions resist productivity improvements such as the introduction of new machinery or changes in work rules, then the effect will go in the opposite direction. What can we conclude from this figure? Like when we studied the effect of taxes on prices and quantities of goods in Unit 8, we now use the labour market model we have constructed the two curves to see how a policy change will shift one or both of these curves.
The effect of a policy is determined by how it changes the point of intersection of the two curves. Consider an improvement in the quality of education and training that future employees receive, which increases the productivity of labour. What is the effect of this productivity increase on real wages and equilibrium employment?
For example, point A is the opposite vertex to side BC. Select all drawings in which a corresponding height h for a given base b is correctly identified. Andre drew a line connecting two opposite corners of a parallelogram. Select all true statements about the triangles created by the line Andre drew. These dashed segments represent heights of the triangle. These dashed segments do not represent heights of the triangle. Select all the statements that are true about bases and heights in a triangle.
Any side of a triangle can be a base. There is only one possible height. A height is always one of the sides of a triangle. A height that corresponds to a base must be drawn at an acute angle to the base.
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