Labor and Financial Markets (Economics)

Recall cards applying demand and supply to two special markets. In the labor market employers demand labor, workers supply it, and the wage is the price: the law of demand and supply, the equilibrium wage, and how a wage above or below equilibrium creates unemployment or a labor shortage. Derived demand and the factors that shift labor demand and labor supply. The minimum wage as a price floor, the living wage, and when a minimum wage is non-binding. In the financial market savers supply financial capital, borrowers demand it, and the interest rate is the price: the rate of return, equilibrium, excess supply and excess demand, the factors that shift the supply of financial capital, and usury laws as a price ceiling. Finally, the market system as an information mechanism: how prices collect and transmit information about scarcity and profitability so that consumers and producers respond appropriately without any central authority and without knowing the cause, and how price controls distort that information.