Th3.5: ^^ Monopoly in the Labour Market Flashcards

1
Q

What does the existence of trade unions mean?

A

they can operate as the only seller of labour

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2
Q

What is a trade union?

A

an organisation with members who are usually workers or employees, which protects the rights and pay of workers through a process of collective bargaining

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3
Q

What is the first way they could increase wages?

A

they could set barriers of entry which would reduce supply

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4
Q

What is the second way they could increase wages?

A

set wages at a specific wage and ensure workers are not prepared to work for less, creating a kinked supply curve as seen in Graph 45 in our PP (they grey line)

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5
Q

Refer to PP

Look at Graph 45. Supply is perfectly elastic up to output of…

A

QS and if the company wanted to employ more than this they would have to increase wages further

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6
Q

Refer to PP

Look at Graph 45. The firm will employ where supply is…

A

equal to demand, at QDW2

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7
Q

Refer to PP

Look at Graph 45. What will both of these methods to increase wages lead to?

A

higher wages but cause a fall in employment from the perfectly competitive equilibrium of Q1W1

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8
Q

How has the government been able to reduce the power of trade unions?

A

through acts which have introduced postal ballots, outlawed secondary picketing, restricted the size of the picket line and forced unions to provide 14 days’ notice of action

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9
Q

Draw Graph 45 three times!

A

whoop whoop

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