Demand for labour 3.5.1

Question 1

What 3 factors affect elasticity of labour demand

Answer 1

Substitutes
% of total cost
Time

Question 2

Define labour substitutability

Answer 2

How easy it is to replace workers when their wages increase

Question 3

In markets where workers are easy to substitute workers what elasticity will workers have

Answer 3

Elastic

Question 4

Define percentage of total cost

Answer 4

What % of total cost is made up by workers wages

Question 5

When wages make up a small percentage of total costs what elasticity will workers have

Answer 5

inelastic