3.5.3 - Wage Determination In Competitive & Non-competitive Markets

Question 1

What Are The Labour Market Characteristics?
(5 Points)

Answer 1

~ There are many potential workers and employers.
~ Labour is homogenous.
~ There is perfect information.
~ Firms are wage takers.
~ There are no barriers to entry or exit.

Question 2

One Labour Market Characteristic Is ‘There Are Many Potential Workers And Employers’ What Does This Mean?

Answer 2

There are lots of firms out there who are willing and able to hire workers.

Question 3

One Labour Market Characteristic Is ‘Labour Is Homogenous’ What Does This Mean?

Answer 3

There is no difference in skills.

Question 4

One Labour Market Characteristic Is ‘There Is Perfect Information’ What Does This Mean?
(2 Points)

Answer 4

~ Firms know all skills, qualifications and productivity of all the workers.
~ Workers know the going wage rate.

Question 5

One Labour Market Characteristic Is ‘Firms Are Wage Takers’ What Does This Mean?

Answer 5

There is no control over the wage that is offered.