Equilibrium In Labour Markets Flashcards
1
Q
What is equilibrium in labour markets
A
When the supply of labour matches the demand for labour
2
Q
Labour equilibrium market forces will either
A
Pull wages down if there is excess supply
Push wages up if there is excess demand
3
Q
Perfect competition in labour markets features (5)
A
Homogenous jobs and workers
No impact on the wage level
Perfect knowledge
Many employers and employees
Price takers/ Wage takers
4
Q
What is the P-Max level of employment
A
MRP=MCL
5
Q
WEDL low wage jobs
A
Are highly elastic due to the fact BTE are low
6
Q
Monopsony
A
When there is a sole employer for a particular type of labour, they can use this power to drive down wages
E.g. NHS and doctors
