Labour Markets

Question 1

Labour Market

Answer 1

Any situation in which the buyers and sellers of labour are brought into contact to exchange labour for payment

Question 2

Demand for Labour

Answer 2

The quantity of labour that businesses will ‘purchase’ at various wage rates

Question 3

Derived Demand

Answer 3

A demand for a commodity, service, etc. which is a consequence of the demand for something else

Question 4

Determinants of Labour Demand

Answer 4

Wage Rates

Business Output Levels

Productivity of Labour

Cost of Other Inputs

Question 5

Supply of Labour

Answer 5

The quantity of labour that households are willing to supply at different wages

Question 6

Determinants of the Supply of Labour

Answer 6

Pay Levels & Working Conditions

Education, Skills & Experience

Occupational & Geographical Mobility

The Labour Force Participation Rate

Question 7

The Workforce

Answer 7

That section of the population 15 years of age and above who are either working or actively seeking work

Question 8

The Labour Force Participation Rate

Answer 8

The number of people over 15 working or looking for work

Question 9

A person is defined as being employed if…

Answer 9

They have one or more hours of work per week

Question 10

A person is defined as unemployed if…

Answer 10

They are currently available for for work, are actively seeking work, and are unable to find it

Question 11

Uneployment Rate Formula

Answer 11

Number of Persons Employed/Labour Force

Question 12

Types of Unemployment

Answer 12

Structural Unemployment

Cyclical Unemployment

Frictional Unemployment

Seasonal Unemployment

Long-Term Unemployment

Hidden Unemployment

Hardcore Unemployment

Question 13

Nominal Wages

Answer 13

The wage outcomes of employees without taking inflation into consideration

Question 14

Real Wages

Answer 14

Wage outcomes adjusted for inflation, measure income’s ‘purchasing power’

Question 15

Determinants of Income

Answer 15

Occupation

Productivity

Age

Gender

Ethnic & Cultural Background

Question 16

Income Distribution

Answer 16

The way in which an economy’s income is spread among the members of different social and socio-economic groups

Question 17

Awards

Answer 17

the minimum wages & working conditions for all employees in a particular industry

Question 18

Enterprise Bargaining

Answer 18

the employer and employees negotiate about pay and work conditions at the level of the individual firm, popular over the last three decades

Question 19

Non-Wage Outcomes

Answer 19

Holidays

Awards

Flexible Work Times

Childcare

Question 20

Economic Benefits of Income Inequality

Answer 20

Encourages the workforce to increase skills and education, as well as to work longer and harder

Encourages entrepreneurs to take take risks

Question 21

Economic Costs of Income Inequality

Answer 21

Decrease in overall utility/satisfaction

Decreased economic growth - high income earners have a high MPS, so increasing inequality may lead to decreased consumption & economic activity

Conspicuous Consumption - purchasing a product to be ‘seen’, not to satisfy a need

Question 22

Social Costs of Income Inequality

Answer 22

Creation of Social Classes

Poverty creates social problems such as crime, drug & alcohol abuse, and suicide

Question 23

Industrial Relations

Answer 23

The relationship between employers and employees in terms of wages and working conditions

Question 24

Unions

Answer 24

These are associations that represent employees in the industrial relations system

They aim to improve the wages and working conditions of their members at industrial tribunal hearings and by lobbying the government

Question 25

Employer Associations

Answer 25

These are organisations that represent the interests of employers

The represent their members at industrial tribunals and lobby with the government

Question 26

Australia’s main Industrial Tribunal

Answer 26

Fair Work Commission