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AQA A-Level Economics Year 1 > The Labour Market > Flashcards

The Labour Market Flashcards

1
Q

What type of demand is labour?

A

Derived demand

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2
Q

What does the marginal productivity theory say?

A

The demand for any factor of production depends on its marginal revenue product

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3
Q

What is marginal revenue product?

A

The extra revenue gained by the firm from employing one more worker

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4
Q

What is the formula for marginal revenue product?

A

MRP = MPP X MR

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5
Q

What is the marginal physical product of labour (MPP)?

A

The output produced by each additional worker

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6
Q

What is the marginal cost of labour?

A

The cost of hiring one additional worker

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7
Q

When does a firm have an optimal number of workers?

A

When MRP of labour is equal to MC of labour

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8
Q

When is a firm employing too few workers?

A

When MRP of labour is greater than MC of labour

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9
Q

When is a firm employing too many workers?

A

When MRP of labour is less than MC of labour

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10
Q

What is a firm’s demand for labour generally affected by?

A

Productivity

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11
Q

What do high unit costs suggest?

A

There is low productivity

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12
Q

What is an individual’s labour supply?

A

The total number of hours which that person is willing to work at a given wage rate

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13
Q

What is the labour supply for an occupation?

A

The number of workers willing to work in that occupation at a given wage rate

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14
Q

What is supply of labour in the long run determined by?

A

Monetary and non-monetary factors

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15
Q

What is a monetary benefit?

A

The welfare a worker gains from the wage they receive

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16
Q

What is a non-monetary benefit?

A

Advantages or rewards that employees or individuals receive that are not in the form of direct financial compensation

17
Q

What factors can affect supply of labour?

A

Wage rate
Non-monetary benefits
Population size
Education / Training
Working conditions
Social factors

18
Q

What type of job is supply of labour elastic for?

A

Low skill jobs
Part-time / Temporary jobs

19
Q

What type of job is supply of labour inelastic for?

A

High skill jobs
Significant barriers to entry jobs
Small niche jobs

20
Q

What are wage differentials?

A

Skills / Qualifications
Industry and sector
Geographical location
Discrimination

21
Q

What are the the reasons for wage differentials?

A

Low supply of qualified labour
Low willingness to do job
Productivity is rewarded
Cost of living

22
Q

What is a trade union?

A

An organization of workers formed to protect and promote their interests

23
Q

What are the aims of a trade unions?

A

Higher wages for members
Improved working conditions
Job security
Training and development

24
Q

What are productivity bargains?

A

Agreements between trade unions and employers to link pay increases to productivity improvements

25
Q

What is a downside of trade unions?

A

Higher labour cost
May cause industrial action (strikes)
Restrict flexibility in hiring

26
Q

What is wage discrimination?

A

When workers with the same productivity are paid differently based on characteristics unrelated to their job

27
Q

What is labour market discrimination?

A

When certain groups face unequal treatment in hiring, wages, or promotions based on factors unrelated to productivity

28
Q

What are the advantages of wage discrimination?

A

Lower costs for employers
Increased employment
Cost advantages

29
Q

What are the disadvantages of wage discrimination?

A

Reduces morale
Inefficiency
Inequality
Legal consequences
Market failure

30
Q

What happen to employers as a result of discrimination?

A

Reduced productivity
Higher turnover
Legal and reputational risk
Inefficiency
Lost market opportunities

31
Q

What happen to the government as a result of discrimination?

A

Increased welfare cost
Economic inefficiency
Social unrest
Lower tax revenues

32
Q

What is the national minimum wage?

A

The legal minimum hourly wage employers must pay workers

33
Q

What are the advantages of a national minimum wage?

A

Reduces poverty
Decreases income inequality
Increases work incentives
Boosts productivity
Stimulates demand

34
Q

What are the disadvantages of a national minimum wage?

A

Increased unemployment
Higher business costs
Inflationary pressure
Regional differences
Reduced competitiveness

AQA A-Level Economics Year 1 (12 decks)

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