Labour Markets SaveME Flashcards
(7 cards)
What is the marginal physical product of labour and what is it also known as
Extra output produced when an additional unit of labour is employed
This is also known as law of diminishing marginal returns for labour
What is the marginal revenue product of labour(MRPL)
The extra revenue earned when an additional unit of labour is employed
What is the impact of trade union on perfectly competitive labour markets
Trade union intervention changes the equilibrium edges and employment of a perfectly competitive labour market
- through collective bargaining, workers have the power to increae wages
- this impacts the supply and demand of labour, making the labour market more imperfectly competitive
What is the impact of trade union on monopsony labour markets
The British medical association(BMA) is a trade union that is engaged in negotiating(2023) on behalf of doctors in the NHS(the main employer of UK doctors)
- through collective bargaining, they are looking to improve wages and working conditions
- this includes improving the workload, staffing levels and standards of patient care
What is the impact of a national minimum wage
Governments often intervene in the labour market by setting a minimum wage
- they do this in order to improve equity and avoid the exploitation of worker
A minimum wage is legally imposed wage level that employers must pay their workers
- the minimum wage/hour often varies based on age
Advantages of minimum wage
Guarantees minimum income for the lowest paid workers
Higher income levels help to increase consumption in the economy
My incentivise workers to be more productive
Disadvantages of minimum wage
- raises the costs of production for firms that may respond by raising the price of goods/services
- if firms are unable to raise their prices, the introduction of a minimum wage may force them to lay off some workers, increasing unemployment
