5.3-The interaction of labour markets Flashcards
What is the definition of a labour market?
A labour market is the supply and demand for labour, where employers seek to hire workers and workers seek employment.
True or False: The demand for labour is derived from the demand for goods and services.
True
Fill in the blank: The _____ curve represents the relationship between the wage rate and the quantity of labour supplied.
supply
What factors can shift the labour supply curve?
Factors include changes in population, education levels, and alternative employment opportunities.
Multiple Choice: What is one primary factor that affects the demand for labour?
The level of productivity of workers.
What is the concept of ‘marginal productivity of labour’?
It refers to the additional output produced by employing one more unit of labour.
True or False: Higher wages always lead to an increase in the supply of labour.
False
Fill in the blank: The _____ effect describes how higher wages can lead to a decrease in the quantity of labour demanded.
substitution
What is meant by ‘labour market equilibrium’?
It is the point where the quantity of labour supplied equals the quantity of labour demanded.
Multiple Choice: Which of the following can lead to a decrease in the supply of labour?
Increased university enrollment.
What role do unions play in the labour market?
Unions negotiate wages and working conditions on behalf of workers.
True or False: A minimum wage set above the equilibrium wage can lead to unemployment.
True
Fill in the blank: The _____ curve shows the relationship between wage rates and the quantity of labour demanded.
demand
What is the difference between ‘skilled’ and ‘unskilled’ labour?
Skilled labour requires specialized training or education, while unskilled labour does not.
Multiple Choice: Which factor is least likely to affect the demand for labour?
Weather conditions.
What happens to the labour market if there is an increase in technology?
It may increase the productivity of labour and thus increase the demand for labour.
True or False: The elasticity of labour supply can vary across different industries.
True
Fill in the blank: The _____ effect occurs when workers prefer leisure over work as wages increase.
income
What is ‘labour force participation rate’?
It is the percentage of the working-age population that is either employed or actively seeking employment.
Multiple Choice: Which of the following would likely cause a rightward shift in the labour supply curve?
An increase in the working-age population.
What is the impact of immigration on the labour market?
It can increase the supply of labour and potentially lower wages in certain sectors.
True or False: Labour markets are always perfectly competitive.
False
Fill in the blank: The _____ wage is the minimum pay rate set by law for workers.
minimum
What is ‘disguised unemployment’?
It refers to a situation where individuals are employed but not fully utilized in their jobs.
