Flashcards
Labour Market
Cards in this deck (17)
- 1Labour Market?a set of arrangemets that allows the buyers + sellers of labour to come into contact
- 2Why is the labour market a factor market?-as a market for one of the factors of production
- 3Why is there more than one labour market?because different jobs require different skills and qualifications
- 4Why is the demand curve for labour downwards sloping?-the higher the wage rate, the lower of Ql demanded as increases costs for firms
-as wage rates rise, more labour is replaced by machinery, a less costly substitute - 5Determinants of Demand for Labour?-productivity of the workforce -> if higher = lower unit costs => fall in price for output => Qd rises as firms will need more labour to produce extra output
- 6Explain why the demand for labour is a derived demand?-it is derived from the demand of the good/service that it produces
- 7What does the derived demand result in?-any changes in demand for the good that the labour produces will also change the demand for factors
*incomes
*pop changes
*level of economic activity - 8Elasticity of Demand for Labour (ED Labour)-responsiveness of the quantity demand of labour to a change in wage rates
- 9Formula for ED Labour?% change in Qd / % change in wage rates
- 10Why is ED Labour always negative?-Because WR and QdL have a negative relationship
-when WR increase, QdL falls - 11ED Labour > -1-ED labour is elastic
-% change in QdL is more than proportional to % change in WR
-QdL is responsive to changes in WR - 12ED Labour < 1-ED labour is inelastic
-% change in QdL is less than proportionate to % change in WR
-QdL is not very responsive to changes in WR - 13ED Labour = -1unitary elasticity
- 14Determinants of ED Labour?-time -> longer time period = easier to substitute for capital
-Ease of substitution for capital
-elasticity of D for product -> WR up = P up -> if PED inelastic = Qd fall relative less and so will QdL
-Proportion of labour to total costs - 15Labour Intensive?high proportion of total cost is labour costs
-ED Labour is elastic
-rise in WR will have big effect on firms total unit costs => big increase in P => big decrease in Qd => big decrease in QdL - 16Capital Intensive?Labour costs are a low proportion on total costs
-ED Labour is inelastic
-rise in WR will have small effect on firms total unit costs => only small increase in P => only small decrease in Qd => small decrease in QdL - 17—
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- A level Economics Flashcards on Labour Market, created by Jemima Glazin on 27/02/2017.
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- Jemima Glazin
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