wages rates in perfectly competitive labour markets

Question 1

what is the assumption of perfect competitive markets ?

Answer 1

that all workers possess identical skills and receive the same wage rate
In reality, workers have diverse skill sets and different motivational factors drive them

Question 2

what happens when there is an excess demand for workers

Answer 2

leads to a shortage of workers in a particular occupation, causing wages tend to increase
This causes a rise in wages and is an incentive to workers to enter the labour market for that occupation
This increases the supply of labor

Question 3

what happens when there is excess supply of labour?

Answer 3

leads to a surplus of workers in a particular industry, which causes wages to decrease
This fall in wages cause some workers exit the labour market for that occupation

Question 5

what is the Labou market effected by ?

Answer 5

by changes in
price
demand
supply
price elasticity of demand and supply