23 Labour Market

 

The “discouraged worker effect” occurs when the labour force participation rate

• Rises as the length of time a person is unemployed rises

• Falls as the unemployment rate rises

• Falls as the unemployment rate falls

• Rises as the length of time a person is unemployed falls

Which of the following can be regarded as a non-monetary factor affecting labour supply to an industry?

• The typical weekly working hours, as negotiated by an industry-representative trade union

• The amount of National Insurance that must be paid on earnings

• The opportunity to take advantage of overtime payments

• The wage differentials in the industry

Unemployed workers in the south of a country are unable to take up jobs in the north of the country due to higher housing costs. This is an example of ...

•  

  Frictional unemployment

• Cyclical unemployment

• Geographical immobility of labour

• Occupational immobility of labour

The diagram below shows two labour supply (S₁ and S₂) curves for workers qualified to the level necessary to be employed in a particular industry. All other things being equal, the shift of the supply of labour curve from S₁ to S₂ is most likely to be explained by a reduction in ...

•  Job security for qualified workers in the industry.

• The qualifications required by the industry.

• The productivity of workers in the industry.

• The average wage rate in the industry.

All other things being equal, which one of the following is most likely to cause the marginal revenue product of labour curve in the shoe manufacturing industry to shift to the right?

•   A decrease in money wage rates in the shoe industry.

• A decrease in the number of workers employed in the shoe industry.

• An increase in the market demand for shoes.

• An increase in the number of firms competing in the shoe industry.

The table below shows how a firm’s total and average product change, in the short run, with different inputs of labour. 

Diminishing marginal returns to labour set in when the firm employs ...

• 5 workers

• 6 workers

• 7 workers

• 8 workers

 The marginal revenue product of labour is the...

• addition to total revenue when the firm produces and sells an extra unit of output.

• amount produced per worker per time period.

• change in total output that is produced when one extra worker is employed.

• revenue gained by selling the extra output produced by employing one more worker.

 All other things being equal, the demand for labour is more likely to be wage elastic if...

• it is difficult to substitute capital for labour.

• the cost of labour is a low percentage of total costs.

• the final product has a high price elasticity of demand.

• the supply curve for labour is wage elastic.

Assuming a perfectly competitive labour market, a firm’s demand curve for labour would be derived from its marginal

• Cost curve

• Revenue curve

• Utility curve

• Revenue product curve

The graph shows the market demand for labour (D_L = MRP_L), the market supply of labour (S_L = AC_L), and the marginal cost of labour (MC_L), in a particular industry. The employer in this industry is a monopsonist. From the graph above, it can be concluded that, in the absence of a trade union or a minimum wage, the firm will employ...

•  OQ₁ workers at a wage of OW₁.

• OQ₂ workers at a wage of OW₁.

• OQ₂ workers at a wage of OW₂

• OQ₂ workers at a wage of OW₃.