Labour Markets Flashcards
1
Q
Axis for labour market diagram?
A
y-axis - wage
x-axis - quantity of labour
2
Q
What happens if wages decrease?
A
workers supply less labour, firms demand more
3
Q
Main reasons for shifts in labour supply and demand?
A
- derived demand
- productivity
- capital costs
- migration
- benefits
- income tax
- non-pecuniary benefits
- education and training
4
Q
Productivity and demand
A
- increased productivity increase demand as more profit to be made
- could decrease demand as less workers needed to make same amount
5
Q
Income tax
A
decreased income tax
- decrease supply as need to work fewer hours for same amount
- increase supply to earn more
