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A minimum rate of pay that firms are legally obliged to pay their workers. Most industrial countries have a minimum wage, although certain sorts of workers are often exempted, such as young people or part-timers. Most economists reckon that a minimum wage, if it is doing what it is meant to do, will lead to higher unemployment than there would be without it. The main justification offered by politicians for having a minimum wage is that the wage that would be decided by buyers and sellers in a free market would be so low that it would be immoral for people to work for it. So the minimum wage should be above the market-clearing wage, in which case fewer workers would be demanded at that wage than would be hired at the market wage. How many fewer will depend on how far the minimum wage is above the market wage?
Some economists have challenged this simple supply and demand model. Several empirical studies have suggested that a minimum wage moderately above the free-market wage would not harm employment much and could (in rare circumstances) potentially raise it. These studies are not widely accepted among economists. Whatever it does for those in work, a minimum wage cannot help the majority of the very poorest people in most countries, who typically have no job in which to earn a minimum wage.
Industry:Economy
The market value of a company’s shares: the quoted share price multiplied by the total number of shares that the company has issued.
Industry:Economy
Goods and services that have a high elasticity of demand. When the price of, say, a Caribbean holiday rises, the number of vacations demanded falls sharply. Likewise, demand for Caribbean holidays rises significantly as average income increases, certainly by more than demand for many normal goods. Contrast this with necessities, such as milk or bread, which people usually demand in quite similar quantities whatever their income and whatever the price.
Industry:Economy
Human life is priceless. But this has not stopped economists trying to put a financial value on it. One reason is to help firms and policymakers to make better decisions on how much to spend on costly safety measures designed to reduce the loss of life. Another is to help insurers and courts judge how much compensation to pay in the event of, say, a fatal accident. One way to value a life is to calculate a person’s human capital by working out how much he or she would earn were they to survive to a ripe old age. This could result in very different sums being paid to victims of the same accident. After an air crash, probably more money would go to the family of a first-class passenger than to that of someone flying economy. This may not seem fair. Nor would using this method to decide what to spend on safety measures, as it would mean much higher expenditure on avoiding the death of, say, an investment banker than on saving the life of a teacher or coal miner. It would also imply spending more on safety measures for young people and being positively reckless with the lives of retired people. Another approach is to analyze the risks that people are voluntarily willing to take, and how much they require to be paid for taking them. Taking into account differences in wages for high death-risk and low death-risk jobs, and allowing for differences in education, experience, and so on, it is possible to calculate roughly what value people put on their own lives. In industrialized countries, most studies using this method come up with a value of $5m–10m.
Industry:Economy
The “good life” guide. Calculated since 1990 by the United Nations Development Program, the Human Development Index quantifies a country’s development in terms of such things as education, length of life and clean water, as well as income. Since the mid-1970s, the quality of life for humans throughout the world has improved enormously overall. America's human development index rose by around one-tenth between 1975 and 2001, for example. More spectacularly, during the same period, China's rose by around 40% and Indonesia's by nearly 50%. Even so, in 2001, some 54 countries were poorer than in 1990, and in 34, mostly in Africa and the former Soviet Union, life expectancy had fallen, reversing an impressive long-term trend, largely because of the HIV/AIDS epidemic and crime. Some 21 countries had a lower overall human development index in 2003 than in 1990.
Industry:Economy
A middleman. An individual or institution that brings together investors (the source of funds) and users of funds (such as borrowers). May be increasingly at risk of disintermediation.
Industry:Economy
The ingredients of economic activity: land, labor, capital and enterprise.
Industry:Economy
Взагалі кажучи, період повільно або негативний економічного зростання, як правило, супроводжується зростання безробіття. Економісти мають два точнішого визначення рецесії. Першими, хто може бути важко довести, коли економіка зростає на менше, ніж довгострокові тенденції швидкість його росту і має запасні ємності. Другий – це двох кварталів падіння ВВП.
Industry:Economy
Форма протекціонізму. Країна накладає обмеження на кількість товарів, які можуть бути імпортовані з іншої країни. Наприклад, Франції може обмежити кількість автомобілів, що імпортуються з Японії, щоб сказати, 20000 на рік. В результаті, обмежуючи постачання, Ціна імпортованого товару є вище, ніж це було б під вільної торгівлі, що робить життя простіше для вітчизняних виробників.
Industry:Economy
Основна причина фірм існувати. Економічної теорії прибуток є винагородою за ризик прийняті підприємства, четверта фактори виробництва – те, що залишилося після усі інші витрати, включаючи оренду, заробітної плати і інтерес. Простіше кажучи, прибуток є фірми у загальний дохід мінус загальної вартості. Економісти розрізняти нормальних прибутку і надлишок прибутку. Нормальний прибуток стоїть можливість підприємця, суму прибутку просто достатньо, щоб тримати фірми в бізнесі. Якщо нижче, ніж прибуток, то підприємство би краще off займався деякі альтернативні зовнішньоекономічної діяльності. Надлишок прибуток, також відомий як супер-нормальний прибуток, прибуток вище нормальної прибутку і зазвичай доказів того, що фірма користується деяких ринку влади, який дає змогу більш прибутковим, ніж це було б ринку з досконалої конкуренції.
Industry:Economy
