24 Government Policy and Labour Market

The introduction of a minimum wage in a labour market will:

• raise employment and lower the wage rate

• raise the wage rate and increase employment

• raise the wage rate and increase unemployment

• reduce the wage rate but boost employment

Which of the following is NOT a reason for a government implementing a minimum wage?

• raise incomes of low paid workers

• reduce fairness and increase inequality in the labour market

• benefit disadvantaged workers

• reduce inequality and increase fairness in the labour market

Minimum wage is usually set above the equilibrium wage rate, what impact could this have on the labour market?

• quantity of labour demanded will increase

• quantity of labour supplied will fall

• quantity of labour demanded will stay the same

• quantity of labour supplied will increase

What might explain payment of low wages in a particular occupation?

• a strong trade union

• a low price paid for the products produced

• a limited supply of labour

• short holidays

Which worker is likely to receive the lowest earnings?

• a chief executive

• a dentist

• an IT specialist

• a street cleaner

What could explain why some entertainers earn high wages?

• some enjoy the job more than others

• there is a high demand for their skills

• there is a high number of people wanting to be entertainers

• there is not much training required to be an entertainer

Why are bus drivers paid less than pilots?

• they are less qualified

• they work for longer hours

• their training takes longer periods of time

• they travel shorter distances

Which of the following would cause a rise in the supply of labour?

• a fall in the labour force

• a rise in the qualifications or length of training required to do the job

• a rise in the risks involved in doing a job

• a rise in the wage or no wage benefits in other jobs

In which of the following is the demand for labour likely to be elastic?

• an occupation in which technical progress is developing expensive capital intensive techniques

• an occupation which produces a product with inelastic demand

• an occupation belonging to a labour intensive industry

• an occupation where labour costs form a small proportion of total costs

The introduction of anti-discrimination laws may help to increase the career prospects and wages of disadvantaged groups.

• TRUE

• FALSE