Labour Market Determination Quiz

What is the effect of wages falling in a labour market with excess supply?

• Expands demand for labour and contracts supply.

• Contracts demand for labour and expands supply.

• Maintains current employment levels.

• Increases unemployment.

What is the result of excess supply of labor in a competitive market?

• Skills shortages.

• Unemployment.

• Increased wages.

• Decreased demand.

What is the result of excess demand for labor in a competitive market?

• Skills shortages.

• Unemployment.

• Decreased wages.

• Increased supply.

What is the primary factor that adjusts in a competitive labor market to clear excess supply or demand?

• Legislation.

• Wages.

• Employment levels.

• Government intervention.

What happens to the wage equilibrium when there is an increase in demand for houses?

• Wage decreases

• Wage remains the same

• Wage increases

• Employment decreases

What is the effect of increased demand on employment when wage elasticity of supply is inelastic?

• Employment decreases

• Employment remains the same

• Employment increases

• Employment fluctuates

What are wage differentials?

• Differences in wages between different occupations

• Differences in wages within the same occupation

• Differences in wages due to age

• Differences in wages due to gender

What is a key factor in the wage differential between high and low skilled workers?

• Job satisfaction

• Inelastic demand and supply

• Work environment

• Job security

What is the effect of a maximum wage set above the equilibrium wage?

• No effect on the labor market

• Creates a surplus of labor

• Creates a shortage of labor

• Increases unemployment

What is monopsony power?

• Power of multiple buyers in a market

• Power of a single or few dominant buyers

• Power of all sellers in a market

• Power of consumers over producers