The Supply of Labour

Question 1

Why can’t every worker choose there work hours and leisure hours ?

Answer 1

Workers need a minimum income in Order to be able to achieve a certain living standard

Employees do not always offer that degree of flexibility to their worker

Question 2

What happens when workers reach target income ?

Answer 2

Income effect dominates and the worker chooses to reduce number of hours worked as wage rate increases

Question 3

As income goes up what is the opportunity cost ?

Answer 3

Opp cost of work goes up

Question 4

Characteristic of perfectly competitive labour markets

Answer 4

Industry determines market wage rate

Many workers offering homogenous labour

Employers offering identical jobs

Perfect knowledge regarding wages and conditions

Question 5

In which markets are workers not able to influence the wage rate ?

Answer 5

Competitive labour markets

Question 6

What does an increase in demand do as there is an increase in quantity of of labour in supply ?

Answer 6

Extension of supply

Question 7

Reasons r if shift in supply curve

Answer 7

Population change and net migration
(Increase in supply off labour depending on skills of individual )

Education and training

Changes in other related labour markets
(Wage rate increase for taxi driving so Amazon drivers switch to taxi driving due to transferable skills)

Changes in working conditions

Question 8

Other factors to take into account when deciding a job is preferable?

Answer 8

Working hours

Flexibility

Locations

Holidays or annual leave

Question 9

Is supply of labour is price elastic how easy is it to take that job in the industry ?

Answer 9

Relativley easy

Question 10

4 factors that cause the supply of labour to be more price inelastic

Answer 10

Occupational immobility of labour - skill required

Geographical immobility of labour

Short run wage change (when skill takes time to quire

Non wage incentives - non pecuniary benefits especially in vocational jobs