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Econ > 3.3 Workers (chapter 18) > Flashcards

3.3 Workers (chapter 18) Flashcards

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1
Q

Wage rate definition

A

Payment received by a worker per unit of time worked or unit of output produced

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2
Q

Piece rate definition

A

When a worker is paid per unit of output produced

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3
Q

Time rate definition

A

When a worker is paid per hour worked

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4
Q

Bonus definition

A

An extra payment to workers as a reward for good performance

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5
Q

Commission definition

A

When a worker receives a small percentage of the value of the sales they make

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6
Q

Minimum wage definition

A

A legally set minimum amount that a worker can be paid per hour

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7
Q

Wage differential definition

A

The difference in wages between different workers

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8
Q

Elasticity of demand for labour definition

A

The responsiveness of labour demand to a change in the wage

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9
Q

Elasticity of supply of labour definition

A

The responsiveness of labour supply to a change in the wage

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10
Q

Specialisation definition

A

When a worker, firm or economy concentrates on particular products or tasks

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11
Q

Division of labour definition

A

Workers specialising on particular tasks

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12
Q

Trade union definition

A

An association which represents the interests of a gorup of workers

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13
Q

Industrial action definition

A

Action taken by workers to disrupt production and put pressure on employers to agree to demands

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14
Q

What does wage factor refer to?

A

The pay on offer having a big influence on what job a person decides to do.

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15
Q

The higher the ___________ on offer, the more a person would ___________

A

wage rate

want to do the job

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16
Q

Why does the time rate system benefit the employer? worker?

A

as they can easily estimate their labour costs

workers can bargain collectively about the rate paid.

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17
Q

Whats a disadvantage of the time rate system?

A

It does not reward hard work since it pays lazy and industrious workers the same.

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18
Q

Whats the requirement for the piece rate system to work?

A

if a worker’s output can be easily measured and the product is standardised.

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19
Q

in what industries is piece rate system used? which industries don’t use it?

A

used in manufacturing and agriculture

not used in the service sector

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20
Q

What is overtime pay?

A

Pay for workers who work in excess of the standard working week. It is usually paid at a higher rate

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21
Q

How can overtime pay benefit employers? Employees?

A

Workers with young families may be attracted to jobs that offer regular overtime.

Employes can respond to higher demand without taking on new workers, until they are sure that the higher demand will last.

if demand declines, its easier to reduce overtime than to sack workers.

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22
Q

Disadvantages of overtime pay?

A

There’s a risk that workers may become tired

output they produce over the day may not increase and even its quality may fall

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23
Q

What might happen if workers perceive the payment of bonuses as unfair

A

resentment may be caused which will cause low morale as a result the quantity or quality of their output may fall and some may resign

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24
Q

What are some non-wage factors of the supply of labour?

A

-job satisfaction
- type of work
-working conditions
-Working hours
-Holidays
-Pensions
- fringe benefits
- Job security
-career prospects
-size of the firms
- location

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25
Manual work vs. Non manual work
Non manual work -physically less tiring -offers more metal stimulation -tends to be better paid -tends to lead to higher status manual work -some people are prepared to undertake dangerous work e.g deep sea diving
26
How can working hours vary?
Some occupations offer workers the opportunity to work part-time as well as flexible hours. This is sometimes to suit the employer with workers working longer hours is demand is high. Sometimes to suit the worker Some occupations require workers to work unsociable hours e.g nights and evening Some workers work in shifts- different periods of the day and nights.
27
What does the law set down in certain countries?
minimum length of holiday entitlement for full-time workers
28
What are pensions?
Financial help post unemployment. (varies in different countries and different occupations. e.g workers in public sector receive more generous pensions
29
What are fringe benefits
Extra benefits provided to workers by heir employers e.g free/subsidised meals, health schemes
30
What does job security refer to
Workers are unlikely to be made redundant. Happens more when there is high demand for the product and workers are given long-term contracts
31
What does career prospects refer to
The expectation/prediction that workers will gain a promotion and their pay will rise.
32
How does size of firm affect choice in occupation
People are often more attracted to jobs in large firms and organisations- higher pay, better career prospects, job security
33
What are some limiting factors to an individuals choice in occupation
skills and education- opportunity cost the more occupationally/ geographically mobile workers are, the wider the choice of occupation available
34
What are factors affecting labour supplied
-The level of skill, training, education and qualifications required e.g High level of skills/ qualifications -> low supply -non wage factors affecting how apealing an occupation is -non-wage and wage factors affecting how appealing OTHER occupations are (Wage doesn't shift labour supplied.)
35
Factors affecting labour demanded
-Size and profitability of the industry- "derived demand" -> demand for the worker comes from the demand for the good produced productivity of workers High productivity-> high demand Availability and cost of capital- if capital is USED by workers (compliment) , capital is cheap-> high demand for workers If capital can REPLACE workers (substitutes) , cheap capital-> low demand for workers
36
how can powerful employers affect wages?
groups of employers can bargain and negotiate for better wages. they often join trade unions that carry out industrial action
37
How can powerful monopsonies affect wages?
A monopsony is a market situation where a single buyer (often an employer) has significant control over purchasing labor or goods. This can lead to lower wages, as workers have less bargaining power.
38
What does minimum wage do?
It raises the wage to w(min) above equilibrium which means that people get paid more per hour. However this makes workers more expensive and firms may wish to hire fewer people- contraction in demand, extension in supply leading to a fall in quantity hired/demanded to q(min) This also creates a surplus of labour as more people wish to work at minimum wage than firms wish to hire. These people are then unemployed.
39
What can minimum wage counter
monospony power
40
In which professions do minimum wages raise wages
in lower paid professions. may also raise wages in higher paid professions as employees and employers wish to maintain differentials between different levels of workers.
41
What are public sector wages? How do they affect wages
Public sector wages are salaries paid to employees of government-run organisations, such as teachers, healthcare workers, and civil servants. They can influence overall wages by setting benchmarks for private sector pay and affecting labor market competition.
42
What does public opinion refer to? How does it affect wages?
media campaigns can force governments and firms to pay higher wages. This has a large effect as govt and firms want to be seen as ethical e.g public support for pay rises for nurses
43
How does discrimination impact wages?
leads to lower pay for certain groups e.g women, ethical and racial minorities
44
What are minimum wages
Minimum wages are the lowest legal hourly, daily, or monthly pay that employers must provide to workers, set by the government to protect against extremely low earnings.
45
How do you calculate Elasticity of labour demanded
PEDL: % change in Qd/ % change in wage
46
How do you calculate Elasticity of labour supplied
PESL: % change in Qs/ % change in wage
47
Define PESL and PEDL
PESL: The responsiveness of labour supplied to a change in wage PESD: The responsiveness of labour demanded to a change in wage
48
What are determinants of Elasticity of Labour Demanded?
The proportion of a firm's costs taken up by labour costs How easily labour can be substituted with capital The time period
49
What are determinants of Elasticity of Labour Supplied?
The skills and qualifications and length of training required The mobility of labour The time period
50
What happens if a large proportion of a firm's cost is taken up by labour
They will be more affected by wage changes and therefore more responsive. Demand for labour is elastic
51
If a small proportion of a firms cost is taken up by labour, demand for labour is __________
inelastic
52
If labour can be substituted with capital easily, firms will respond to an increase in wages by __________ which makes demand for labour more __________
Switching to capital elastic
53
What is Elasticity of Labour demanded in the short run after an increase in wage
firms are not likely to immediately fire workers because of contracts, trade unions and because it would be bad for workplace morale. Demand for labour is not responsive and so is inelastic
54
What is Elasticity of Labour demanded in the long run after an increase in wage
Firms may decide to renew existing contracts, they may not replace workers who have left. So demand for labour becomes more responsive to wage changes making it elastic
55
What is labour supplied if High skill and qualifications is required?
inelastic as not many people are capable of joining the profession
56
What happens if labour is more geographically or occupationally mobile?
supply will be more sensitive to changes in wages because workers can easily switch to another professions making labour supply ELASTIC
57
What is supply of labour in the short run?
INELASTIC as it requires time to retrain, see out contracts or move to a different place: all processes a worker may have to go through to supply labour
58
What is supply of labour in the long run?
Workers have more time to make their decisions and go through the processes, making them more responsive and thus labour supplied more ELASTIC.
59
What does specialisation refer to?
the concentration on particular products or tasks (at firm level, workers, countries)
60
What does specialisation lead to?
division of labour
61
what are the advantages of specialisation and division of labour? (for firms)
repetition leads to higher skill and an increase in speed and quality. Thus, output per worker increases thus Lower cost per unit produced Training can happen quickly as well
62
How might specialisation result in higher unit costs? (disadvantage for firms)
- Workers may get bored doing the same task each day -boredom causes mistakes -people may take more days off and this increases. dependence on other workers to cover absences
63
what are the advantages of specialisation and division of labour? (for workers)
-Workers can earn high wages if their skills are in high demand -Enables them to pursue specific interests -Reduces pressure on workers
64
What are disadvantages of specialisation for workers?
Demand for their services may fall as they are occupationally immobile Finding another job will be harder
65
How does division of labour benefit the economy if cost of production is lowered and quality is high?
, The economy may benefit from being able to produce and export more goods and services as competition is high.
66
What is mechanisation?
Mechanisation is the process of using machines to perform tasks previously done by human labor, increasing efficiency and productivity. advantage for firms disadvantage for workers

Econ (17 decks)

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