Labour Market Equilibrium Flashcards
1
Q
How can lab markets be differentiated?
A
Regions
Industries
Skill Groups
2
Q
Outline effects of NAFTA
A
U.S. firms should move to Mexico to take advantage of cheaper labour
US workers who are most substitutable with Mexican workers will experience a wage cut
But: American consumers will gain from cheaper goods
3
Q
What do payroll taxes do?
A
Shift D curve and drive a wedge between cost of labour and net wage
4
Q
Does it matter if tax levied on workers or firms?
A
No!
5
Q
When would payroll tax burden be shifted to workers completely?
A
When supply completely inelastic
