LABOUR MKT - CRITISISM OF MRP

Question 1

How will a worker knwo if theyve got a job

Answer 1

if MRP = wage

Question 2

how are workers paid

Answer 2

according to mrp

Question 3

state 4 problems of MRP

Answer 3

How can we measure productivity

teamwork make it difficult to measure individual productivity

self-employed?

Imperfect labour markets (TU)

Question 4

MEASURING PRODUCTIVITY PROBLEM

Answer 4

might be dififcult ot measure in certina industries e.g teaching

Question 5

why might it be hard ot measure productitivyt in teahcing profession

Answer 5

output they produce may not be marketed

so hard to w/o MRP of teachers

Question 6

if its hard to w/o MRP of teacherswhy is it a problem for schookls

Answer 6

difficult to know at a given wage rate numbers to employ

Question 7

its good saying in theory

we know wage rate and MRP so can decide # of workers for firm to employ

but in reality if we don’t know MRP

Answer 7

it’s difficult to decide number of workes for firm to employ

Question 8

what is hte probelm with assuming indi prodcutivity can be measured

Answer 8

in real world many rpoffession wher eindsutrys work in teams e.g mkting and commuications

Question 9

what happens when indi work and produce outpt in teemas - what is difficult ot do

Answer 9

measure productivity of eahc individual

Question 10

int erms of teamowrk and the problem of not being able/dificult to measure an individuasls productivty if a worker is looking for a new job whats the problem for firms

Answer 10

dififcult for firms to know indi MRP

and thefore see if it = to wage rate

Question 11

what is the overall problem for firms and MRP theory when we assume indidividual prodcutivity canbe measure

Answer 11

at given wage rate dificil to know whether to employ person or not

Question 12

Whats wrong with assumption workes are paid according to MRP in terms of self employment

Answer 12

Self employed may not use this idea when paying themselves,- as may not pay according to marginal revenue product

So this distorts theory of workers paid by MRP

Question 13

in tems of imperfect labour markets and TU what assumption do we make

Answer 13

were working with perfectly competitive LM

Question 14

Give example of what could be an imperfect labour market

Answer 14

trade unions bargaining for higer wages

Question 15

explain how TU bargaining for higher wage and being a imperfect market can distrupt our theory

Answer 15

higher wages being bargained for could have nothing to do with MRP of workers

maybe TU just want workers to be paid more even if pay increase is greater than MRP

Throwing off theory and going against fact workers always paid according to MRP

Question 16

So overall what do 2 key assumptions do our 4 criticism disrupt

Answer 16

workers paid according to RMP

firms make employment decison based on MRP of workers

these break down so MRP theory breaks down