Demand for and Supply of Labour
45 questions· page 1 of 5
With the help of a diagram, assess whether the impact of an increase in labour productivity on the wages and employment of a firm is likely to be greater in a perfectly competitive labour market than in an imperfectly competitive labour market.
The average wage of chief executives in large companies in a country is over 100 times greater than the average wage of their employees.
Assess how economic theory can account for this variation in average wages.
With the help of a diagram, assess the importance of the supply of labour in relation to the wage and employment levels for firms operating in perfectly competitive and monopsony labour markets.
A country imposes a tariff of 20% on imported goods and restricts the number of immigrants entering the country.
Evaluate, with the aid of a diagram(s), the impact of these two policies on the rate of inflation in that country.
The best outcome for labour markets is that the forces of supply and demand are left to determine wages without government interference.
Discuss with the use of diagrams, whether this statement is always true.
Explain what is meant by the marginal revenue product theory and consider the relationship between this theory and a trades union’s ability to gain higher wages for its members.
Distinguish between economic rent and transfer earnings and, with the help of diagrams, discuss why famous sports people receive much higher pay than street cleaners.
Discuss the effectiveness of government policies which increase the net advantage of labour on the long–term supply of labour in an economy.
Compare the impact of an increase in labour productivity on a firm in a monopsony labour market with an increase in labour productivity on a firm operating in a perfectly competitive labour market.
‘Wage differentials can be explained by economic theory. They are a sign of the power of a firm to exploit its workforce and are unjust.’
Do you agree with this view?
After negotiation, the workers in an industry obtained from employers higher wage rates. The employers’ spokesperson said ‘the cost of the deal would have to be met through improved productivity or by reductions in other costs’.
Analyse whether this deal can be incorporated into the economic theory of wages and consider the possible outcome for employment of such a deal.
After negotiation, the workers in an industry obtained from employers higher wage rates. The employers’ spokesperson said ‘the cost of the deal would have to be met through improved productivity or by reductions in other costs’.
Analyse whether this deal can be incorporated into the economic theory of wages and consider the possible outcome for employment of such a deal.