Labour Market: OCR Unit 3

HideShow resource information
What is derived demand for labour?
Demand that is driven by the demand for the goods the labour would produce
1 of 19
What MRP of L?
Marginal Revenue Product of Labour is the extra revenue earned from employing one more worker
2 of 19
MRP of L equals...
MPP x MR
3 of 19
When do firms hire workers?
When MR is greater than MC
4 of 19
What cause shifts in Demand of labour? Plus how do they shift D?
Change in D, Productivity, Change in wage rate, Extra costs of labour, Price of substitutes for labour, Economic activity
5 of 19
What is elasticity of demand?
% change in Quanity of labour / % change in wage rate
6 of 19
Factors that influence elasticity of demand, and how do they influence?
PED of product produced, labour costs as a % of total costs, Ease of factor substitution, Time
7 of 19
What is substitution effect?
increase in wage = increase in quantity
8 of 19
What is income effect?
As target income is reached, as wage increases, Q is reduced to increase leisure time.
9 of 19
Factors affecting Supply of Labour in the LR for an individual are?
Pecuniary and Non Pecuniary factors
10 of 19
Factors affecting S of L for a job or industry?
Size of working population, competitiveness of wages, publicity of job opportunities, Net migration
11 of 19
Factors affecting elasticity of S of L
Skills and qualifications required, length of training, immobility of labour
12 of 19
How are wages determined?
Market forces ( D & S)
13 of 19
What are wage differentials?
Differences in wage between different groups of workers or between workers in the same occupation.
14 of 19
Why do wage differentials exist?
Highly skilled workers demands higher wages, different region can have different supply, different industries have differing elasticities of D & S
15 of 19
What are wages made up of?
Transfer Earnings and Economic Rent
16 of 19
What are transfer earnings?
min. payment to keep worker in present job
17 of 19
what is economic rent?
excess above Transfer earnings
18 of 19
Proportion of TE and ER
Inelastic curves- ER>TE, Elastic Curves - ER
19 of 19

Other cards in this set

Card 2

Front

What MRP of L?

Back

Marginal Revenue Product of Labour is the extra revenue earned from employing one more worker

Card 3

Front

MRP of L equals...

Back

Preview of the front of card 3

Card 4

Front

When do firms hire workers?

Back

Preview of the front of card 4

Card 5

Front

What cause shifts in Demand of labour? Plus how do they shift D?

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 The labour market resources »