Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

economics > labour market > Flashcards

labour market Flashcards

1
Q

what is the supply of labour determined by

A

those who want to be employed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

what type of demand is labour

A

derived demand (comes from the demand from what it produces)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

what does the downard sloping demand curve show

A

inverse relationship between how much the workers are paid and how many are employed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

what could firms do if wages get too high

A

switch out production for capital - cheaper and efficient

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

factors effecting demand for labour

A

-cheaper substitutes e.g mechanisation
-profit of the firm e.g. AC
-number of firms in the market
-strenght of the economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

calculation for marginal revenue product

A

MRP = MP x MR

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

what is the marginal product of labour

A

additional output each extra unit of labour can produce

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

what is the marginal revenue of labour

A

additional revenue derived from each extra unit of labour

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

inelastic demand for labour

A

strikes and lower supply increase the wage rate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

what effects the elasticity of demand

A

labour costs as a proportion of total costs
easy switches to substiutes
PED of the product labour will produce

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

supply of labour

A

number of people willing to work x hours they can work

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

non-monetary considerations on supply of labour

A

how satisified and working conditions of their job

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

what does the upward sloping labour supply curve show

A

the proportinal relationship between how much works are paid and how many are willing and able to work

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

causes of shifts in the supply curve for labour

A

demographics of the population (school leaving age, immigration)
trade unions (people know their rights can be defended)
taxes and benefits (if too high or low may draw from labour market)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

labour market equillibrium

A

where supply and demand for labour meet, which determines the equillibrium price for labour (wage rate) in a perfectly competitive market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

why are wages not flexible

A

the minimum wage makes wages sticky
e.g during a recession, the wage rate would not go up. instead workers would be sacked.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

what contributes to imperfections in the labour market

A

monopsony power
trade unions
imperfect info

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

impact of monopsony power

A

there is only one buyer in the labour market, they have wage rate setting power
they will employ where MC=MRp

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

impact of trade unions

A

if push for higher wage above the minimum wage, labour is likely to be more flexible

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

how do trade unions demand for higher wages

A

limiting supply - strikes
closing firms
collective bargaining

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

impact of imperfect information

A

qualified workers may not be aware of higher wages in other indsutries
unaware of benefit in investing in skill and education
can limit production potential

22
Q

aims of trade union

A

protect workers
secure jobs
improve working conditions

23
Q

if trade unions try increase wages too much…

A

firms may not be able to afford to employ workers
firms may close down/reduce the number they employ

24
Q

how do trade unions stop exploitation of worker

A

aim to increase MRP in market and increase wages to the level of MRP

25
in order for the minimum wage to be effective it must be set...
above the free market price
26
4 positives of NMW
yield positive externalities, increase standard of living for poorest, increase incentives to work, govt make more tax revenue
27
2 negatives of NMW
could make it harder for young people to find job due to lack of experience could make country less competitive on a global scale
28
5 reasons why might people be payed different, even in the same jobs
former education - those who have a degree likely to earn more skills- jobs with more training often mean higher wages pay gaps- wage gap between skilled an unskilled is increasing in uk due to technological change and globalisation
29
marginal productivity theory
employers will tend to hire workers of a particular type until the contribution that the last (marginal) worker makes to the total value of the product is equal to the extra cost incurred by the hiring of one more worker.
30
shifts in demand curve for labour
changes in the product demanded change in the price of the final product changes in labour productivity change in the price of capital
31
factors dtermining the elasticity of demand for labour
labour costs as a % of total costs (higher = more elastic) ease and cost of factor substitution (easier = more elastic) elasticity of demand of the final product
32
shifts in supply of labour
wages in alternative occupations barriers to entry improvement in occupational mobility of labour value of leisure time
33
factors determining the elasticity of labour supply
more inelastic = higher skills and qualification requirements time taken to respond to wage changes
34
why is the wage determined by S+D in perfectly competitive markets
because they are price takers many workers have the same skills identical jobs are on offer there is perfcet info the supply curve is perfectly elastic (AC=MC)
35
features of a monopsony labour market
they have power to set the wages there is one employer
36
example of monopsony employer
government in employing civil servants, nurses and teachers
37
disadvantages of monopsony
exploitation of workers low wages
38
wage inequality may be caused by
skills and qualification differences gender pay gaps - skilled and unskilled due to technological change and globalisation discrimination - age, ethnicity, disability
39
which market structure is most likely to wage discriminbate
monopsony as they have wage setting power e.g a cleaner for NHS will not be payed as much as a doctore for NHS because of the difference in skills and qualificationd required
40
advantages of wage discrimination
employers may demand more labour therefor employing more as wage discimination allows firms ot minimise their labour costs employers can make more profits - supernormal profits which allow the case for dynamic efficiency
41
disadvantages of wage discrimination
increases the problem of inequality - those on lowest only paid transfer earnings so may increase relative poverty can force down the ewage rate in the market - those who want to live in the uk long term may not be satisifed
42
labour market discrimination
when specific groups are treated differently in the same job as others with no proven difference in productivity
43
equality act 2010
made labour discrimination illegal in the uk
44
conditions necessary for LD
ability to identify different groups
45
misallocation of resources LD
overqualied workers - skills are underutilised
46
what does LD lead to
market failure higher costs and less efficiency
47
LD cost on gov
discirminated against workers may need support e.g welfare benefits and JSA paying the discriminated against lower wages may mean less tax revenue lower efficiency = less internationally competitive
48
if firms did not LD
increase price competitiveness and no worsening of trade deficit and lower average labour costs
49
advantages of trade unions
counter balance monopsony wage setting power fair representation of employees preventing exploitation productivity deals co operation between management and workers efficiency wage theory
50
efficiency wage theory
higher wages = greater incentive to increase productivity and output
51
disadvantages of trade unions
pushing wages above the market equillibirum can cause unemployment through firms not being able to afford the costs cost push inflation (occurred in the 1970s) in a gig economy it is harder for unions to have an impact
52

economics (33 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions