Microeconomics Topic 6 YR1 Flashcards
(45 cards)
What are the factors affecting supply of labour?
Wage rate, non-wage factors, barriers to entry, population demographics, substitutes for labour.
How do non-wage factors affect labour supply?
Job satisfaction, working conditions and fringe benefits can attract of deter workers.
What are barriers to entry in the labour market?
Barriers such as qualifications and training requirements limit the labour supply.
How does population demographics influence labour supply?
Factors like age distribution, migration, and birth rates affect labour supply.
What determines equilibrium wage in the labour market?
Equilibrium wage is determined by the intersection of labour demand and supply curves.
What is real wage?
Real wage is the wage adjusted for inflation, representing purchasing power.
What is the elasticity of demand for labour?
Elasticity of demand for labour measures employers’ responsiveness to wage changes.
What factors affect the elasticity of demand for labour?
Availability of substitutes, proportion of labour costs in total costs, time period.
What is the elasticity of supply of labour?
Elasticity of supply of labour measures workers’ responsiveness to wage changes.
What factors affect the elasticity of supply of labour?
Training/skills required, labour mobility, unemployment levels.
What is monopsony power in the labour market?
Monopsony power occurs when a single dominant employer can suppress wages and employment levels.
How do trade unions cause labour market failure?
Trade unions can push wages above equilibrium, causing unemployment.
What is labour immobility?
The inability of workers to move between jobs or locations due to geographical or occupational constraints.
What is geographical immobility of labour?
Workers are unable to move to different regions for work opportunities.
What is occupational immobility of labour?
Workers lack the skills or qualifications to take available jobs.
What is information failure in the labour market?
Workers and employers lack full information about job opportunities or labour availability.
What is the National Minimum Wage?
A legally enforced minimum hourly wage to prevent worker exploitation.
What are the advantages of a National Minimum Wage?
Reduces exploitation, poverty, and incentivizes work.
What are the disadvantages of a National Minimum Wage?
May cause unemployment if set above the equilibrium wage.
What is a maximum wage?
A legally enforced wage ceiling to reduce inequality.
What are the pros and cons of maximum wages?
Reduces inequality but may demotivate high-skilled workers.
How does education and training improve the labour market?
Improves labour productivity and reduces occupational immobility.
What is the impact of migration policies on the labour market?
Attracts skilled workers to reduce labour shortages.
What are wage differentials?
Wage differentials refer to differences in wages between workers or job types.
