5.2 - supply of labour Flashcards
1
Q
Factors affecting supply of labour
A
Wage rates
Skills
Education
Non-wage benefits
2
Q
Substitution effect
A
Higher wage = more likely to work (less value in leisure)
3
Q
Income effect
A
Higher wage = get more income quicker = less likely to work (more value in leisure)
4
Q
Factors affecting wage elasticity of supply
A
Qualifications
Geographic mobility
Occupational mobility
Experience
Skills
5
Q
SR supply of labour
A
Inelastic
Diminishing marginal returns
6
Q
LR supply of labour
A
Elastic
All FoP variable - can interchange capital + labour
7
Q
Economic rent
A
Income earned from a FoP which is greater than the minimum amount necessary to employ the FoP
8
Q
Transfer earnings
A
The minimum payment necessary to prevent a FoP from moving
9
Q
Do lower skilled jobs have higher / lower economic rent
A
Lower
