The Labour Market (Edexcel A-Level Economics A): Quizzes
📚Quizzes
Practise the questions
10 questions from this quiz
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Practise the questions
10 questions from this quiz
What does it mean that labour demand is 'derived demand'?
What does it mean that labour demand is 'derived demand'?
Firms demand labour for the output produced
Why does the labour demand curve slope downward?
Why does the labour demand curve slope downward?
Higher wages make labour costly; firms hire less
What does the law of diminishing marginal productivity state?
What does the law of diminishing marginal productivity state?
Extra output per worker falls as more hired
What happens to labour demand when demand for a firm's product increases?
What happens to labour demand when demand for a firm's product increases?
Labour demand curve shifts rightward
When is wage elasticity of labour demand more elastic?
When is wage elasticity of labour demand more elastic?
When capital easily substitutes for labour
What is the substitution effect when wages rise?
What is the substitution effect when wages rise?
Work becomes more rewarding; supply more labour
When does a backward-bending supply curve occur?
When does a backward-bending supply curve occur?
Income effect dominates at high wage levels
Why does industry labour supply typically slope upward?
Why does industry labour supply typically slope upward?
Higher wages attract workers from elsewhere
What happens when wages are below labour market equilibrium?
What happens when wages are below labour market equilibrium?
Labour shortage; firms offer higher wages
How does monopsony power affect employment compared to competitive markets?
How does monopsony power affect employment compared to competitive markets?
Employs fewer workers at lower wages