the labour market Flashcards
(21 cards)
What is derived demand?
Demand for labour comes from demand for the product it helps produce.
What is marginal productivity theory?
Workers are hired up to the point where marginal revenue product = wage.
What does the labour demand curve show?
Inverse relationship between wage rate and quantity of labour demanded.
What causes a shift in labour demand?
(A) Productivity. (B) Demand for goods. (C) Technology. (D) Costs.
What determines the elasticity of labour demand?
(A) Time. (B) Ease of substitution. (C) Elasticity of demand for product. (D) Labour’s
share of total costs.
What influences labour supply to an occupation?
(A) Wages. (B) Conditions. (C) Qualifications. (D) Training costs.
What non-monetary factors affect labour supply?
(A) Job satisfaction. (B) Conditions. (C) Flexibility.
What does the labour supply curve show?
Positive relationship between wage rate and labour supplied.
What causes shifts in labour supply?
(A) Population changes. (B) Migration. (C) Education. (D) Benefits.
How are wages determined in a perfectly competitive labour market?
Equilibrium of labour supply and demand.
What factors cause imperfections in labour markets?
(A) Monopsony power. (B) Trade unions. (C) Imperfect information.
What is a monopsony?
A single buyer of labour.
What happens to wages and employment in a monopsony?
Both wages and employment are lower than in perfect competition.
How can trade unions affect wages?
They can negotiate higher wages.
How can trade unions affect employment?
May reduce or increase employment depending on market conditions.
What factors affect union power?
(A) Union density. (B) Public support. (C) Legislation. (D) Labour elasticity.
What are the effects of a national minimum wage?
(A) Raises incomes. (B) May cause unemployment. (C) Reduces poverty.
What are the pros and cons of a national minimum wage?
(A) Pros: higher wages, reduced exploitation. (B) Cons: possible unemployment,
higher costs for firms.
What are the conditions for wage discrimination?
(A) Market power. (B) Group separation. (C) Different price elasticities.
What are the impacts of discrimination in labour markets?
(A) Lower pay. (B) Employment gaps. (C) Social inequality.
What are the pros and cons of wage discrimination?
(A) Pros: profit maximisation. (B) Cons: unfairness, reduced productivity.
