Th3.5: ^^ Wages

Question 1

The supply of labour curve for an individual is a…

Answer 1

backward bending curve - an increase in wages will lead to an increase in hours worked at first but beyond a certain point, it will decrease in hours worked

Question 2

What are the two ways firms can increase the number of hours worked by its workforce?

Answer 2

it can increase the number of hours by its existing labour force or it can recruit new workers

Question 3

Therefore, although an increase in wage rates may not increase the number of hours worked by existing labour…

Answer 3

it will increase the number of workers - this is because new workers may join from other industries or from being unemployed