Labour Markets Flashcards
Perfectly Contestable Labour Market Diagram
Name the features of a Perfectly Contestable Labour Market
- many firms
- perfect knowledge
- same job
- free movement
What happens below Q1 in a Perfectly Contestable Labour Market?
workers make lower contribution than their wages - inefficient
What is the equation for MRP
MRP = Marginal Product x Price
Monopolistic Labour Market Diagram
Where is profit maximisation?
MCL = MRP
Where is the wage rate?
Q1 crosses ACL - lowest cost
What is the diagram for Discrimination?
What is perceived MRP?
what wage setters believe a worker will produce - can be based on stereotypes
What is the diagram for Different Skills Level?
What is the diagram for Trade Union - Labour Monopoly
What is the difference between a minimum wage and trade union wage?
Minimum wages are set by government for the nation, trade union wages are set by trade unions for one market
What may trade unions fight for instead of wages?
Better working conditions
What can trade unions do?
go on strike - workers stop working
What is the diagram for Trade Unions and Monopsonies?
What is a bilateral monopoly
Balance of power between a monopoly (trade union) and a monopsony (firm)
How do workers gain bargaining power?
Through the trade union
What factors impact the elasticity of demand for labour
- labour costs
- ease of factor substitution
- PED for good or service
- level of economic activity
What factors affect the elasticity of supply for labour?
- skills and education
- vocational aspects
- time period
- length of training
- working conditions
- changes in wages
