Perfectly Competitive Labour Market

The Labour Market

Supply / Demand
Draw the market supply curve for labour.
Why does it slope like this?
Draw a backward sloping supply curve for labour.
Why might it slope like this?
Substitution effect –
Income effect -
What are the non-monetary factors that influence the supply of labour for an occupation? / Why do firms demand labour?
What type of demand do all of the factors of production have?
What is meant by marginal revenue product?
How is it worked out?
Draw the demand curve for labour
Why does it slope like this?
What can move the MRP curve?

Draw the equilibrium wage and employment level in a perfectly competitive market for the market and a firm.

Show the impact of the following on the MRP curve. In each case what is likely to happen to the wage and employment?

Event / Diagram / Effects on pay and employment
An improvement in technology leads to production workers producing more.
The price of clothing in the shops falls.

Imperfectly Competitive Labour Markets (Monopsony)

What is meant by a monopsony? Give an example.

Draw and explain the equilibrium for a monopsonist labour market.

Trade Unions

What is the purpose of a trade union?

How might trade unions influence a perfectly competitive labour market?

How might a trade union affect a monopsonistic labour market?

National Minimum Wage

The National Minimum Wage will raise wages for workers on low pay

What is a NMW and what are its possible effects on a labour market?

Elasticity of Demand and Supply

Wages will depend on the productivity of workers and the elasticity of demand and supply of workers.

Illustrate how these factors affect wages

Elasticity of demand for workers

What factors determine the elasticity of demand for workers?

Elasticity of supply of workers

What factors determine the elasticity of supply of workers?

Non-monetary factors

Some jobs are unpleasant and so workers are paid a higher wage to compensate.

Give some examples of jobs where compensating wage differentials might be paid

Discrimination

Some firms may be able to wage discriminate. Explain how this would work and the pros and cons of such practice.

Some groups of workers might be discriminated against. Give some examples of this. How will it influence wages and levels and types of unemployment.

AQA - June 13 Q11 and 12