3.5.2 - Supply Of Labour

Question 1

What Are The Factors Influencing The Supply Of Labour?
(6 Points)

Answer 1

~ Wages, backward bending supply curve.

~ Changes in migration levels.

~ Non-monetary benefits of the job.

~ Trade union presence.

~ Education and qualifications.

~ Income tax levels.

Question 2

What Does The Elasticity Of The Labour Supply Curve Measure?

Answer 2

Responsiveness of labour supplied, given a change in the wage rate.

Question 3

What Are The Factors Influencing The Elasticity Of Labour Supply?
(3 Points)

Answer 3

~ Skills and qualifications.

~ Unemployment levels.

~ Time.

Question 4

Describe ‘Skills & Qualifications’ As A Factor Influencing The Elasticity Of Labour Supply
(2 Points)

Answer 4

~ Few skills or qualifications = elastic, meaning low wages.

~ Many skills or qualifications = inelastic, meaning high wages.

Question 5

Describe ‘Unemployment Levels’ As A Factor Influencing The Elasticity Of Labour Supply
(2 Points)

Answer 5

~ High unemployment = elastic, as more people need jobs, lower wages.

~ Low unemployment = inelastic, less people need jobs, higher wages.

Question 6

Describe ‘Time’ As A Factor Influencing The Elasticity Of Labour Supply
(2 Points)

Answer 6

~ SR = inelastic, takes time to develop skills, higher wages.

~ LR = elastic, people develop more skills overtime, lower wages.

Question 7

What Are Examples Of Market Failure In The Labour Market?
(2 Points)

Answer 7

~ Occupational immobility of labour.

~ Geographic immobility of labour.

Question 8

Describe Occupational Immobility Of Labour, As A Source Of Market Failure Within The Labour Market
(2 Points)

Answer 8

~ Lack skills needed for another jobs.

~ Leading to structural unemployment.

Question 9

Describe Geographical Immobility Of Labour, As A Source Of Market Failure Within The Labour Market
(3 Points)

Answer 9

~ Workers struggle to move between different areas.

~ Due to family ties, cost of moving e.t.c.

~ Leading to unemployment.