Economics Section A Part 3

HideShow resource information
What is labour?
The number of people available for work; in a country, the working population.
1 of 16
What is the division of labour?
Where production processes are split into smaller parts; each worker does a specific task.
2 of 16
What are the advantages of DOL for the firm?
Greater efficiency (workers become experts), greater use of specialist equipment, reduced production time, easier organisation
3 of 16
What are the advantages of DOL for the worker?
Become an expert and so easier to find employment, as expert get higher pay, as more skilled have higher status, more job satisfaction, better promotion prospects.
4 of 16
What are the disadvantages of DOL for the firm?
Productivity/quality can fall is tasks are boring, lack of flexibility (workers cannot be switched between tasks), if a specialist is absent the whole production process may stop.
5 of 16
What are the disadvantages of DOL for the worker?
Demoralisation/loss of interest through repetitive tasks, if skill no longer required- long term unemployment, repetitive tasks taken over by machine- unemployment.
6 of 16
How are wages determined? What is the equilibrium wage?
Through supply and demand for labour. Where supply and demand are equal.
7 of 16
What factors affect demand for labour?
Demand for goods produced by the labour, cost and availability of substitutes (machines), productivity, employment costs (taxes, recruitment costs)
8 of 16
What factors affect supply for labour?
Changes in school leaving age, changes in retirement age, role of females in society, net migration.
9 of 16
Why are wages different?
More skills/training/qualifications needed- higher wages, dangerous/dirty work- higher wages, expanding industries, more demand- higher wages, in a trade union- perhaps higher wages.
10 of 16
Why is the quality of labour important?
Firms want literate, numerate people who can communicate well. Productivity will be higher is workers are well-educated and trained.
11 of 16
How can the quality of human capital be improved?
Through investment in education and training (responsibility shared between state and firms)
12 of 16
What is minimum wage legislation? What are its effects?
Prevents employers paying employees less than a certain hourly rate. Set above equilibrium wage, so demand will decrease.
13 of 16
Why is minimum wage legislation introduced?
To benefit disadvantaged workers, to reduce poverty and to help businesses (promote quality and fairness, worker motivation will improve).
14 of 16
What are trade unions?
Organisations that protect the interests of workers. Negotiate pay and working conditions, provide legal protection (represent workers), pressurise govs to pass laws, provide benefits like strike pay.
15 of 16
What are the effects of trade unions?
May force up wages (pressure employers with industrial action, may give in to avoid disruption)- could cause unemployment as demand will reduce at higher wage rate. Can be avoided if productivity rises, if prices rise or if profit margins fall.
16 of 16

Other cards in this set

Card 2

Front

What is the division of labour?

Back

Where production processes are split into smaller parts; each worker does a specific task.

Card 3

Front

What are the advantages of DOL for the firm?

Back

Preview of the front of card 3

Card 4

Front

What are the advantages of DOL for the worker?

Back

Preview of the front of card 4

Card 5

Front

What are the disadvantages of DOL for the firm?

Back

Preview of the front of card 5
View more cards

Comments

No comments have yet been made

Similar Economics resources:

See all Economics resources »See all Section A Part 3 resources »