461531
Immobility of Factors of Production
- OCCUPATIONAL IMMOBILITY= as
patterns of demand and employment
change, many workers may find it
difficult to easily secure new jobs, since
they may lack the necessary skills
- GEOGRAPHICAL IMMOBILITY=
where workers find it difficult to move
to where employment opportunities
may be, due to family ties and
differences in housing costs
- If markets are to
function properly then
all markets for factors
of production must
function properly.
- Reasons why factor markets do not always function efficiently
- the labour market
- it is a key factor market as
labour must be fully mobile
for a market to function well
- workers may not be able to
move easily from one form
of employment to another
(occupational immobility)
- as employment patterns change through changes in the structure
of the economy, workers may not find it easy to transfer their
skills, e.g. coal miners having to become computer technicians or
financial consultants; they wouldn't possess the relevant skills for
theses new jobs so would require training
- redundant workers may get 'stuck' and be unable to get a
new job as the economy changes what it produces
- This is known as 'structural unemployment'
- This is a form of market failure as labour is being under-utilised
- This is a form of market failure as labour is being under-utilised
- This is known as 'structural unemployment'
- redundant workers may get 'stuck' and be unable to get a
new job as the economy changes what it produces
- as employment patterns change through changes in the structure
of the economy, workers may not find it easy to transfer their
skills, e.g. coal miners having to become computer technicians or
financial consultants; they wouldn't possess the relevant skills for
theses new jobs so would require training
- workers may not be able to
move easily from one form
of employment to another
(occupational immobility)
- Workers may not easily be able to move from employment
in one area to employment in a different region
- This could be because of family ties,
preventing geographical movement
- It could also be due to significant
differences in house prices so it's
difficult to move from a low-cost to
high-cost region
- This is geographical immobility
- Result is when employment contracts in one area of the country and
expands in another, workers are unable to move from the area where
economic activity is contracting to where it;s expanding
- Unemployment is created leading to market failure
- Unemployment is created leading to market failure
- Result is when employment contracts in one area of the country and
expands in another, workers are unable to move from the area where
economic activity is contracting to where it;s expanding
- This is geographical immobility
- It could also be due to significant
differences in house prices so it's
difficult to move from a low-cost to
high-cost region
- This could be because of family ties,
preventing geographical movement
- it is a key factor market as
labour must be fully mobile
for a market to function well
- the labour market
Want to create your own Mind Maps for free with GoConqr? Learn more.