24 Supply of labour

Question 1

Supply of labour

Answer 1

Ability and willingness of households to work at different wage levels

Question 2

Factors effecting supply of labour (wage)

Answer 2

Causes movement along curve - extension or contraction

Question 3

Factors effecting supply of labour (wages in other industries)

Answer 3

Rational for a households to want to supply labour to industry offers the highest wages
- a change in wage in a different industry is likely to affect supply of labour

Question 4

Factors effecting supply of labour (non-monetary benefits)

Answer 4

• Longer holidays, training, job security
• occupations with high levels of non-monetary benefits are likely to have a higher number of workers that are willing and able to offer services

Question 5

Factors effecting supply of labour (qualifications or skills needed )

Answer 5

Some occupations require qualifications or skills that both everyone has
- the more qualifications needed the fewer people who an supply labour
- cost of qualifications can also be a factor

Question 6

Factors effecting supply of labour (demographics)

Answer 6

Population structure
- number of people at working age
- number of retired people
- migration of workers

Question 7

Factors effecting supply of labour

Answer 7

• wage
• wages in other industries
• non-monetary benefits
• qualifications or skills needed in the job
• demographics

Question 8

Factors effecting wage elasticity

Answer 8

• availability of workers
• skills and qualifications
• nature of the job
• labour immobility

Question 9

Factors effecting wage elasticity (availability of workers)

Answer 9

Affects response to a change in wage
- high unemployment a small change in wage leads to large change in quantity of labour

Question 10

Factors effecting wage elasticity (skills and qualifications)

Answer 10

As wage increases, more workers might want to offer labour but lack of skills or qualifications msuy stop them from doing so
- more skills and qualifications more inelastic

Question 11

Factors effecting wage elasticity (nature of jobs)

Answer 11

• person could never drawn to job even if wages are low
• some jobs may be undesirable even though they have high wages

Question 12

Factors effecting wage elasticity (labour mobility)

Answer 12

• rational for worker to change occupation if wage is higher
• some professional workers may be unwilling to move into manual job or geographical areas even if wage is higher

Question 13

Short run and long run supply of labour

Answer 13

Short run - inelastic - can’t swap jobs as they need skills or qualifications
Long run - elastic - people can train to swap to different jobs