Sec.3 Microeconomic decision makers Ch.16-23 Flashcards
Factors that affect an individual’s choice of occupation
Wage factors, non-wage factors, and limiting factors.
Earnings
The the total pay received by a worker.
Wage rate
A payment which an employer contracts to pay a worker (The basic wage a worker received per unit of time or unit of output).
Wage factors
Wage, overtime, overtime pay, bonuses, commission rates.
Non-wage factors
Job satisfaction, type of work, working conditions, working hours, holidays, pensions, fringe benefits, job security, career prospects, size of the firms, location.
Limiting factors
Occupational choice and opportunity cost.
National minimum wage (NMW)
A minimum wage rate for a hour’s work, fixed by the government for the whole economy.
Wage differential
The difference in wages.
Primary sector
Industries involved in the extraction of natural resources.
Secondary sector
Industries involved in manufacturing and construction.
Tertiary sector
Industries involved in the provision of services.
Elasticity of demand of labor
The measure of the responsiveness of demand for labor to a change in the wage rate.
Determinants of elasticity of demand for labor
Proportions of labor costs in total costs, the replicability of labor with capital, elasticity of demand for product produced, time period.
Elasticity of supply of labor
The measure of the responsiveness of the supply of labor to a change in the wage rate.
Determinants of elasticity of supply of labor
Qualifications and skills required, length of training period, level of employment, mobility of labor, degree of vocation, time period.
Division of labor
The specialisation of labor.
Craft unions
Trade unions representing workers with particular skills and from a range of industries.
General unions
Trade unions representing workers with a range of skills and from a range of industries.
Industrial unions
Trade unions representing workers in a particular industry.
White collar unions
Trade unions representing workers in particular professions
Role of trade unions
Negotiations for the betterment of wage and non-wage factors of their members, protection or improvement of their members, provision of information.
Collective bargaining
Representatives of workers negotiating with employer’s associations.
Basis of wage claims
Workers deserve to be paid more as they are working harder, ability to pay workers more due to rise in profits, comparability of wage to similar workers, maintenance of real income.
Factors affecting the strength of a trade union
Level of economic activity, proportion of workers of a firm or industry which is part of the trade union, number of members, level of skill of represented members, demand for product produced by workers, favorability of legislation.
Industrial action
When workers disrupt production to put pressure on employers to agree to their demands.
Types of industrial action
Overtime bans, working to rule (also known as go slows) and strikes.
