Th3.5: ^^ Wages Flashcards

1
Q

The supply of labour curve for an individual is a…

A

backward bending curve - an increase in wages will lead to an increase in hours worked at first but beyond a certain point, it will decrease in hours worked

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2
Q

What are the two ways firms can increase the number of hours worked by its workforce?

A

it can increase the number of hours by its existing labour force or it can recruit new workers

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3
Q

Therefore, although an increase in wage rates may not increase the number of hours worked by existing labour…

A

it will increase the number of workers - this is because new workers may join from other industries or from being unemployed

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