Labour Market 2

Question 1

Supply of labour

Answer 1

Number of workers willing and able to work, multiplied by the hours they are willing and able to work at each given wage.

Question 2

3 factors influencing supply of labour

Answer 2

1. Number of people available to do that job
2. Non-monetary factors in particular industry
3. Barriers to entry into the labour market

Question 3

How is “number of people available to do that job” is a factor influencing the supply of labour

Answer 3

Higher wage rate, more labour supplied, which means supply curve of labour slopes upwards. Workers wage along with any bonus, provides main monetary benefit from work.

Question 4

How is “Non-monetary factors in particular industry” a factor influencing the supply of labour

Answer 4

Benefits to the job, such as job security, holiday entitlement, promotional prospects.

Question 5

How are “ barriers to entry into the labour market” a factor influencing the supply of labour

Answer 5

Qualifications, will make the supply of labour less than it would be with no barriers.

Question 6

One factor that changes the equilibrium wahe rate

Answer 6

1.
Changes in demand or supply of labour such as “marginal revenue product”

Shifts demand curve to the right and increase employment and wage rate.

2.

Increase in people’s preference for a job will shift supply curve to the right, increasing supply, but reduces wage rates.

Question 7

Human capital

Answer 7

Quantity and quality of labour

Question 8

Human capital gap

Answer 8

Widened pay gap