Part 5: Factor Markets
In our discussion of labour markets in Chapter 14 , we have clarified the
explanation of how a monopsony employer influences the outcome for
wages and employment. We have also rewritten the explanation of the
effect of a minimum wage in the presence of monopsony firms. In the
discussion of income inequality, we have added material on the changing
income shares and also on the absolute dollar amounts required to be
part of “the 1 percent.” In our list of possible causes of rising income
inequality, we have added the phenomenon of the “gig economy,” and
this leads to a large new box on its importance, why it is occurring, and
the implications for public policy.