Labour Markets Flashcards
What can cause labour demand curve to shift outwards?
- Increased consumer demand
- Increased labour productivity
- Lower capital productivity
- Foreign competition
- Government employment subsidies
What does an elastic labour demand curve mean?
Labour demand does not respond much to change in wage rate.
The wage elasticity of demand depends on what?
- The price elasticity of demand of final product
- Proportion of costs spent on labour
- Ease and cost of factor substitution
Elastic means a change in the wage rate results in a large change in labour demand.
Characteristics of a price elastic product?
Price elastic product:
- Large labour costs
- Easy factor substitution
- Long-run
What is meant by labour supply?
Labour supply is the amount of labour workers are willing to offer at a given wage rate.
What can cause the labour supply curve to shift outwards?
- Better working conditions
- More non-monetary benefits
- Lower wage in substitute jobs
- Lower barriers to entry
- Higher population
What effects the wage elasticity of supply?
- Skill levels required
- Amount of training required
- Time frame
What does an elastic wage elasticity of supply mean?
Elastic means a change in the wage rate results in a large change in the labour supply.
Characteristics of an elastic wage elasticity of supply?
- Low skill
- Low training requirement
- Long-run
What does an elastic wage elasticity of demand mean?
Elastic means a change in the wage rate results in a large change in labour demand.
