7 - the labour market: demand and supply Flashcards

1
Q

occurs when the demand for a factor of production arises from the demand for the output it produces

A

derived demand

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2
Q

key theory underpinning the demand for labour

A

theory of marginal productivity

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3
Q

the value of the physical addition to output arising from hiring one extra unit of production

A

marginal revenue product (MRP)

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4
Q

the change in total output arising from hiring one more worker

A

marginal product of labour

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5
Q

the responsiveness of quantity demanded of labour to a change in the wage rate

A

elasticity of demand for labour

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6
Q

the percentage of the population who are either not in work nor seeking it

A

economically inactive

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7
Q

the percentage of the population of working age currently in work or actively seeking work

A

participation rate/activity rate

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8
Q

the financial rewards to a particular occupation, e.g wage, commission, bonus.

A

monetary factors

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9
Q

the non-financial rewards to a particular occupation, e.g holidays and leisure time

A

non-monetary factors

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10
Q

the overall rewards to a particular occupation, taking into account both monetary and non-monetary factors.

A

net advantage

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11
Q

the number of people of working age who do not currently have a job but are actively seeking work at existing wage rates

A

unemployment

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12
Q

the responsiveness of quantity of labour supplied to a change in wage rates

A

elasticity of supply of labour

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13
Q

the individual labour supply curve is thought to be this shape because it is assumed workers will prefer to work fewer hours as their income increases above a certain level

A

backward-bending supply for labour

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14
Q

depending upon an individuals target level of income, he or she can work fewer hours for the same overall pay

A

income effect (of a wage increase)

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15
Q

individuals will tend to choose to work more hours, as the opportunity cost of leisure increases

A

substitution effect (of a wage increase)

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