The Labour Market (Edexcel A-Level Economics A): Flashcards

Demand for labour based on output it produces, not direct use

Downward - inverse relationship between wage and quantity

Extra workers add less output as more hired with fixed capital

Easy availability of substitutes (capital for labour)

Higher wages make work rewarding, so workers supply more labour

Higher wages let workers maintain standards with fewer hours

Worker supplies less labour at very high wages (income effect wins)

Upward - higher wages attract workers from other industries

Where quantity firms want to employ equals quantity workers supply

Single/dominant employer in market, pays lower wages, hires fewer