Economics - Work - Revsion Guide

A revision guide that covers the second topic in the AQA Economics Syllabus

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WORK
2.1 Why People Work & the Nature of Work
Why people work:
o Pay ­ Many people work full-time to fund their lifestyles
and to pay for other family members who don't work.
Pay can be a motivation factor, so some people may
work in order to provide for a specific purpose. (Like
getting paid & then saving up for something.)
o Job Satisfaction ­ If people work when they don't need
the income (money), then it may be because of either
the social aspect of the job, or the enjoyment of a
job.
Why people may not work:
o Education ­ People may choose to stay in full-time
education eg university.
o Child Care ­ People, esp. Women may choose not work
because they have young children. This is more likely if
the parent is a single-parent or if the person's partner
provides enough for the whole family.
o Retirement ­ People may not work because they have
retired. The official retirement age is 65. Some people
may work longer because they find that the state
retirement pension is insufficient to fund their lifestyle.
Growth in Services
There has been a gradual shift in employment patterns.
Employment in manufacturing and similar industries declines
and employment in the service sector grows. Many of the UK's

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Specialisation
Advantages of Specialisation/Division of Labour
To the business:
o Specialist workers become quicker at producing goods.
o Production becomes cheaper per good because of this.
o Production levels are increased.
o Each worker can concentrate on what they are good at
and build up their expertise.
To the worker:
o Higher pay for specialised work.
o Improved skills at that job.
Disadvantages of Specialisation/Division of Labour
To the business:
o Greater cost of training workers.…read more

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Wages and Salaries
WAGE
An individual's payment usually for a week's work
SALARY
An individual's payment usually for a month's work
Higher wages usually result from:
o Skills
o Qualifications / training
o Special talents (footballer / singer)
o Experience
o Dangerous work
o Supply and demand of labour
SUPPLY AND DEMAND FOR LABOUR
In the diagram above:
o Supply of labour: The number of workers willing to work
at each wage rate
o Demand for labour: The number of workers required at
each wage…read more

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REMEMBER!
The lower the supply of labour for a particular industry the
higher the wage rate e.g. professional footballers
The greater the supply of labour for a particular industry - the
lower the wage rate e.g. cleaner
Gross Pay ­ The total amount of money a job will pay,
before deductions are made.
Net Pay ­ The amount of money after all deductions are
made, eg Tax, NI, Pension.
2.…read more

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State Benefits ­ if benefit payments were low, workers
would be more willing to work as they wouldn't be able
to survive on such low benefits.
Derived Demand
Derived demand is where workers are not wanted for the
businesses own sake, but for what they can contribute to
production.…read more

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Shortages of Labour ­ If there is a shortage of labour
in a particular industry, businesses will need to offer
higher wages. This will encourage more workers to
provide their labour for that particular industry. Supply
of labour decreases, so wage rates go up to
encourage workers.
2.4 Understanding Unemployment
Problems/Costs of Unemployment To ..…read more

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Qualifications ­ school leavers who leave with no
formal qualifications could be unemployed for longer
periods of time because they have no experience.
o Age ­ older people may find it harder to get jobs as they
expect higher wages are considered too old to train for
new positions. However, age-related discrimination is
illegal.
Reducing Unemployment
Reducing unemployment is a key target for all Governments.
High unemployment has enormous costs for individuals,
businesses, the Government and the economy.…read more

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