THEME 3 - THE LABOUR MARKET - Mr Steeds

Question 1

derived demand

Answer 1

the demand which comes from the demand for something else
- eg: demand for bricks is dervived from spending on new construction projects

Question 2

marginal costs

Answer 2

the wages paid for an additional worker

Question 3

marginal ( physical) product

Answer 3

the output produced by additional workers

Question 4

marginal revenue product of labour

Answer 4

additional revenue generated by employing additional workers

Question 5

evaluation points for marginal revenue products

Answer 5

• output is hard to measure
• collabrative work makes it difficult to measure productivity of individual workers
• have to assume all workers can work the same job
• have to assume all workers are the same and work at the same rate

Question 6

what does the demand for labour tell you?

Answer 6

how many workers a business will employ at a given wage rate in a given time period

Question 7

factors influencing the demand for labour

Answer 7

• the wage rate
• the demand for products
• productivity of labour
• profitability of firms
  -substitutes
• the number of buyers of labour ( monopsonist )
• employment taxes

Question 8

the labour supply

Answer 8

the number of workers willing and able to work at a given wage rate

Question 9

factors influencing supply for labour

Answer 9

• wage rate
• size of the working population
• migration
• peoples preferences for work
• net advantages of work ( free food, discounts )
• work and leisure
  -length of training
• greater barrier to entry

Question 10

income effect

Answer 10

how a change in demand for a good is affected by a change in real disposable income
- eg: if school fees increase, disposable income will reduce therefore decrease in demand

Question 11

substitution effect

Answer 11

how a chnage in price of goods affect demand compared to others

Question 12

ways unions can affect the supply of labour

Answer 12

• can attract workers into the labour market due to benefits of becoming a member
• ## unions exert control over the labour supply and can withdraw labour by limiting working hours or going on strike

Question 13

geographic mobility

Answer 13

ability of labour to move around an area, region or country in order to work

Question 14

occupational mobility

Answer 14

ability of how easy it is for a workwe to move from one job to another