U1 AOS 2 – Market Case Study: Labour Market Flashcards
(16 cards)
What is the definition of the labour market?
The labour market is the supply and demand for labour, where employers seek to hire workers and workers seek employment.
True or False: An increase in demand for goods will generally lead to an increase in the demand for labour.
True
Fill in the blank: The _______ curve represents the relationship between the quantity of labour supplied and the wage rate.
supply
What happens to the equilibrium wage when there is an increase in the supply of labour?
The equilibrium wage typically decreases.
Multiple Choice: Which factor can cause a shift in the demand curve for labour?
Changes in technology, business conditions, and consumer demand.
What is the definition of disequilibrium in labor markets?
Disequilibrium in labor markets occurs when the supply of labor does not equal the demand for labor, leading to unemployment or labor shortages.
True or False: Disequilibrium can lead to wage rigidity.
True
Fill in the blank: When there is excess supply of labor, it often results in __________.
unemployment
Which of the following can cause disequilibrium in labor markets? A) Minimum wage laws B) Flexible working hours C) Increased demand for goods
A) Minimum wage laws
What is one possible consequence of prolonged disequilibrium in labor markets?
Increased skill mismatch among workers and employers.
What is a monopsony in the context of labor markets?
A monopsony is a market structure where there is only one buyer for labor, giving that buyer significant control over wages and employment conditions.
True or False: In a monopsony, employers have to compete for workers by raising wages.
False. In a monopsony, employers can set lower wages since workers have fewer alternative employment options.
Which of the following is a consequence of monopsony in labor markets? (A) Increased competition for workers (B) Decreased wages (C) Higher employment rates
B) Decreased wages
What is typically considered a high paying job?
A job that offers a salary significantly above the median income level, often requiring advanced education or specialised skills.
True or False: Low paying jobs usually require extensive education and training.
False
What is one major factor that contributes to the wage gap between high paying and low paying jobs?
The level of education and specialised skills required for high paying jobs.
