Labour Markets

Question 1

Define quality of labour

Answer 1

–> Quality of labour refers to the skills, knowledge and expertise of workers

–> The greater the quality of labour, the greater the potential productivity for the business

Question 2

Define quantity of labour

Answer 2

–> Quantity of labour refers to the number of available workers to the business

Question 3

What is the labour market made up of?

Answer 3

made of 2 things:

–> sellers of labour
–> buyers of labour

Question 4

define derived demand

Answer 4

where the demand for one good comes from the demand for another good THAT IT IS USED TO MAKE

-> labour is a derived demand

Question 5

define demand for labour and where it comes from

Answer 5

–> is derived demand

–> comes from firms who require labour to produce goods/services

–> the amount of labour firms are willing to purchase at a given wage rate

Question 6

define supply for labour and where it comes from

Answer 6

–> the amount of labour/time that households are willing to work for at the given wage rate

–> comes from households

Question 7

factors affecting demand for labour

p_ic_ o_ th_ p_od_ct

Answer 7

if the selling price of the product increases then, the firm will be incentivised to supply more, and so demand for labour will shift RIGHT (and vice versa)

Question 8

factors affecting the demand for labour

de_a__ f_r f__al pro_du__

Answer 8

-> Demand for final product

–> as demand for labour is derived demand, when an economy is doing well, demand for most goods and services will increase so demand for labour will shift RIGHT (and vice versa)

Question 9

factors affecting the demand for labour

ab__it_ t_ s_bst_tu_e h_m_n c_pi_al f_r m_ch_ne_y

Answer 9

-> Ability to substitute human capital for labout

if firms can effectively switch from human capital to machinery to reduce LRAC, demand for labour will shift LEFT

Question 10

factors affecting the demand for labour

T_e p_od_ct_vi_y o_ l_b_ur

Answer 10

-> The productivity of labour

if the productivity of labour increases (through things like training) this will lower LRAC and firms will likely demand more labour so D-L will shift RIGHT

Question 11

factors affecting the supply for labour

P_p_l_t_on s_ze

Answer 11

A larger population means more people are potentially available for work

–> increases S-L

Question 12

factors affecting the supply for labour

A_e d_stri_ut_on of t_e po_u_a_i_n

Answer 12

–> More developed countries, such as Japan, have an older, aging pop that reduces S-L

–> Less developed countries often have a younger pop, increasing S-L

Question 13

factors affecting the supply for labour

M_g_a_i_n

Answer 13

–> Increased migration number means an increased number of S-L

Question 14

factors affecting the supply for labour

P_r_i_i_a_i_n r_te

Answer 14

–> This is the number of people willing to work within the working age group.

DEPENDENT ON 3 THINGS:

1. female participation
2. retirement age
3. School leaving age

Question 15

factors affecting the supply for labour

S_h_o_-le_vi_g a_e

Answer 15

–> An increase in the school leaving age can lead to a decrease in S-L and vice versa

Question 16

factors affecting the supply for labour

S_i_l_ a_d q_al_fi_a_io_s

Answer 16

–> an increase in the skills and qualifications can increase the S-L for specific industries

–> However, if school leaving age tends to be very low, workers are likely to be more unskilled which would decrease S-L

Question 17

factors affecting the supply for labour

M_b_li_y o_ l_b_u_

(2 types: g_o_r_p_i_al and o_c_p_t_o_a_l)

Answer 17

1. geographical –> the ease in which workers can move from city to city or country to country for employment
2. occupational –> the ability for workers to change occupations when they lose a j*b.