Wages, earnings, total compensation, and income
There are a few basic: · wage = payment per unit of time · earnings = wage x hours (labor payment over an interval of time, typically a week, month, quarter, or year) · total compensation = earnings + fringe benefits · fringe benefits = payments-in-kind + deferred compensation · income = total compensation + unearned income Topic 3, 4. Labor Supply (1st and 2nd parts) This topic examines the determinants of labor supply. The framework for this discussion relies on the basic neoclassical model in which individuals are assumed to face a trade-off between labor and leisure time. In this model, it is assumed that there are only two possible uses of time: labor and leisure. Each individual is assumed to select the mix of time and purchased inputs that maximizes his or her level of satisfaction (utility).
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