5.2 Supply Of Labour

Question 1

How is the supply of labour calculated

Answer 1

Number of workers willing and able to work at the current wage rate multiplied by the number of hours they can work

Question 2

What affects the supply of labour

Answer 2

The wage rate

Demographics of the population

Migration

Advantages of work

Leisure time

Trade unions

Taxes and benefits

Training

Question 3

Why is the curve for supply of labour upward sloping

Answer 3

As a higher wage rate is offered, more workers are willing and able to work

Question 4

What is meant by the elasticity of the supply of labour

Answer 4

This is the responsiveness of the quantity of labour supplied to a change in the wage rate

Question 5

What can affect the elasticity of supply of labour

Answer 5

Skills of the workforce

Length of training

Sense of vocation (non financial rewards)

Time period

Question 6

What is meant by transfer earnings

Answer 6

This is the minimum reward that is needed to keep labour in the current occupation

Question 7

What is meant by economic rent

Answer 7

This is the income earned which is more than transfer earnings

Income earned that is above the minimum required to keep labour in the occupation