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

Question 1

Why is the demand for labour in a specific industry considered a 'derived demand'?

Accepted Answer

It is determined by the demand for the final goods or services that the labour produces.

Question 2

A firm operates in a perfectly competitive labour market. If the Marginal Revenue Product (MRP) of the last worker hired is $45 and the market wage rate is $50, what should the firm do to maximize profit?

Accepted Answer

Reduce the number of workers because the marginal cost of labour exceeds the marginal benefit.

Question 3

Which of the following factors would shift the labour demand curve for software engineers to the right?

Accepted Answer

An increase in the consumer demand for software applications.

Question 4

In a monopsony labour market, how does the marginal cost of labour (MCL) compare to the average wage rate?

Answer

MCL is equal to the average wage rate.

Answer

MCL is lower than the average wage rate because of economies of scale.

Answer

MCL is higher than the average wage rate because the firm must raise wages for all existing workers to hire one additional worker.

Answer

MCL is constant regardless of the number of workers hired.

Question 5

What are the primary effects of imposing a national minimum wage in a perfectly competitive labour market, where the minimum wage is set higher than the equilibrium wage?

Answer

An excess supply of labour (unemployment).

Answer

An increase in the total number of people employed.

Answer

A decrease in the equilibrium wage rate.

Answer

A reduction in the quantity of labour demanded by firms.