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Microeconomics > Labour Markets > Flashcards

Labour Markets Flashcards

1
Q

Perfectly Contestable Labour Market Diagram

A
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2
Q

Name the features of a Perfectly Contestable Labour Market

A
  • many firms
  • perfect knowledge
  • same job
  • free movement
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3
Q

What happens below Q1 in a Perfectly Contestable Labour Market?

A

workers make lower contribution than their wages - inefficient

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4
Q

What is the equation for MRP

A

MRP = Marginal Product x Price

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5
Q

Monopolistic Labour Market Diagram

A
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6
Q

Where is profit maximisation?

A

MCL = MRP

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7
Q

Where is the wage rate?

A

Q1 crosses ACL - lowest cost

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8
Q

What is the diagram for Discrimination?

A
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9
Q

What is perceived MRP?

A

what wage setters believe a worker will produce - can be based on stereotypes

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10
Q

What is the diagram for Different Skills Level?

A
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11
Q

What is the diagram for Trade Union - Labour Monopoly

A
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12
Q

What is the difference between a minimum wage and trade union wage?

A

Minimum wages are set by government for the nation, trade union wages are set by trade unions for one market

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13
Q

What may trade unions fight for instead of wages?

A

Better working conditions

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14
Q

What can trade unions do?

A

go on strike - workers stop working

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15
Q

What is the diagram for Trade Unions and Monopsonies?

A
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16
Q

What is a bilateral monopoly

A

Balance of power between a monopoly (trade union) and a monopsony (firm)

17
Q

How do workers gain bargaining power?

A

Through the trade union

18
Q

What factors impact the elasticity of demand for labour

A
  • labour costs
  • ease of factor substitution
  • PED for good or service
  • level of economic activity
19
Q

What factors affect the elasticity of supply for labour?

A
  • skills and education
  • vocational aspects
  • time period
  • length of training
  • working conditions
  • changes in wages

Microeconomics (3 decks)

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