Take this Exam: A-Level Economics: Labour Markets | Zestly

Question 1

How can a trade union potentially increase both wages and employment in a monopsony labour market?

Accepted Answer

By negotiating a minimum wage that is higher than the monopsony wage but lower than the competitive equilibrium wage.

Question 2

Which of the following are recognized as 'compensating differentials' that explain wage differences between jobs?

Accepted Answer

Higher pay for jobs with dangerous or unpleasant working conditions.

Question 3

If the price of the final good produced by a firm increases, what is the immediate effect on the Marginal Revenue Product (MRP) of labour?

Accepted Answer

The MRP increases because each unit of output now generates more revenue.

Question 4

Which of the following scenarios describes a situation where labour supply is likely to be highly wage-inelastic?

Answer

The job requires no specific training and can be learned in one day.

Answer

The job requires a highly specialized degree that takes ten years to obtain.

Answer

The job is in a remote area that workers from elsewhere find very difficult to move to, so geographical immobility limits the pool of available workers.

Answer

The job is part-time and can be performed by almost anyone in the population.

Answer

The job is in an industry with a very high rate of technological automation.

Question 5

In a competitive labour market, what determines the equilibrium wage rate?

Answer

The intersection of the market demand for labour and the market supply of labour.

Answer

The average cost of living in the region.

Answer

The total revenue generated by the industry.

Answer

The collective bargaining power of the largest firm in the industry.