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Y2 Micro > 3.5 Labour Markets > Flashcards

3.5 Labour Markets Flashcards

1
Q

What does the demand curve for labour show?

A

The quantity of labour that employers wish to hire at each possible wage rate.

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2
Q

What is derived demand in the context of labour?

A

The demand for labour is derived from the demand for the product that the labour produces.

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3
Q

What are the factors influencing the demand for labour?

A
  • Wage rates
  • Demand for the product
  • Prices of other factors of production
  • Wages in other countries
  • Technology
  • Regulation
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4
Q

How do wage rates affect the demand for labour?

A

As wage rates increase, demand for labour contracts since the MRP of labour must be higher.

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5
Q

What happens to the demand for labour if there is no demand for the product?

A

There is no demand for labour.

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6
Q

True or False: Improvements in technology can lead to a decrease in demand for labour.

A

True

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7
Q

What does price elasticity of demand (PED) for labour measure?

A

The responsiveness of the quantity demanded of labour to the wage rate.

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8
Q

What factors affect the PED of labour?

A
  • Price elasticity of demand for the product
  • Proportion of wages to total cost of production
  • Availability of substitutes
  • Time
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9
Q

What does the supply of labour curve show?

A

The ability and willingness of people to make themselves available to work at different wage rates.

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10
Q

List factors influencing the supply of labour.

A
  • Wages
  • Population and distribution of age
  • Non-monetary benefits
  • Education/training/qualification
  • Trade unions and barriers to entry
  • Wages and conditions of other jobs
  • Legislation
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11
Q

What is occupational immobility?

A

Difficulty workers face in moving from one job to another due to a lack of transferable skills.

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12
Q

What is geographical immobility?

A

Difficulty workers have in moving from one location to another due to costs, family, etc.

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13
Q

What is the impact of immobility on the labour market?

A

It can create excess supply of labour in one area and excess demand in another.

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14
Q

What does elasticity of supply refer to?

A

The responsiveness of supply to a change in wage rates.

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15
Q

What are the wage determination factors in competitive markets?

A

Wages are determined purely by demand and supply.

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16
Q

What happens in a monopsony market?

A

There is only one buyer of labour, leading to higher wages for all if one wage is increased.

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17
Q

What role do trade unions play in the labour market?

A

They protect workers’ rights and pay through collective bargaining.

18
Q

What is bilateral monopoly?

A

A market situation where both a monopsonist and a monopoly exist.

19
Q

What are some current issues in the labour market?

A
  • Skills shortages
  • Young workers
  • Retirement
20
Q

Fill in the blank: The UK suffers from a severe _______ shortage.

A

skills

21
Q

What effect does a recession have on young workers entering the workforce?

A

They tend to receive lower lifetime earnings compared to those entering during better times.

22
Q

What is the impact of rising life expectancy on the government budget?

A

It increases welfare spending as pensioners make up over 50% of it.

23
Q

What is a significant issue during hard economic times regarding employment?

A

Firms are unlikely to employ new workers but are reluctant to let go of current workers, leading to struggles for the young to get a job.

24
Q

What demographic is contributing to rising government budget pressures related to retirement?

A

Pensioners, particularly as the baby boomers reach retirement age.

25
Q

What percentage of welfare spending do pensioners make up?

A

Over 50%.

26
Q

What is one of the main issues associated with wage inequality?

A

Those on the highest wages have seen their wages grow by a bigger percentage than those on the lowest wages.

27
Q

What are zero-hour contracts?

A

Contracts where employees do not know how much they will earn each week and receive little notice of when they are required to work.

28
Q

What is the ‘Gig economy’?

A

An economic sector where many people are self-employed and undertake short-term contracts.

29
Q

How does migration affect the labor market according to the text?

A

It may cause a fall in wages but allows employers to recruit from a larger pool of workers and helps fill skills shortages.

30
Q

What was the purpose of the National Minimum Wage introduced in April 1999?

A

To raise people out of poverty and establish decent minimum standards in the workplace.

31
Q

What is the National Living Wage?

A

A wage introduced for workers over 25 years old, with a government pledge for it to be £9 by 2020.

32
Q

List arguments for the National Minimum Wage.

A
  • Reduces poverty by impacting lowest wages
  • Reduces male/female wage differentials
  • Decreases labor turnover
  • Increases workforce motivation
  • Provides an incentive to work
  • Ensures fair wages
33
Q

List arguments against the National Minimum Wage.

A
  • Potential loss of jobs
  • Increased costs for companies leading to higher prices
  • Wage spiral effect
  • Ineffectiveness in reducing poverty due to regional differences
34
Q

What is the impact of the National Minimum Wage dependent on?

A

Where it is set in relation to current wages and the elasticity of supply and demand.

35
Q

What are maximum wages?

A

Limits set on how much individuals, such as chief executives, can earn.

36
Q

What is a potential consequence of introducing maximum wages?

A

Excess demand within the industry and a possible loss of the best workers.

37
Q

What effect does the strength of trade unions have on public sector wage setting?

A

Weak trade unions allow the government to make wage decisions to improve the budget.

38
Q

What was the impact of the public sector pay freeze from 2010 to 2015?

A

It put downward pressure on private sector wages.

39
Q

What methods can the government use to improve geographical mobility of labor?

A
  • Improve housing supply and affordability
  • Enhance transport links
  • National advertising for jobs
  • Introduce subsidies in areas with labor shortages
  • Move public agencies out of London
40
Q

What strategies can improve occupational mobility of labor?

A
  • Increase vocational training
  • Encourage further study
  • Promote workplace training
  • Target education towards skills shortages
41
Q

Fill in the blank: The government can also encourage _______ work patterns to allow more parents to work.

A

[flexible]

42
Q

What can be done to reduce discrimination in the labor market?

A

Subsidize employers who hire unemployed individuals from groups with above average unemployment rates.

Y2 Micro (6 decks)

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