Demand for labour

Explain the factors that determine a firm’s demand for labour.

All other things being equal, Table 7 shows how the number of workers employed by a profit-maximising firm affects its total output per hour and the price it is able to charge for the product produced.

The firm pays its workers £18 per hour. It does not have any other variable costs and its fixed costs are £3 per hour.

How many workers will the firm employ?

Figure 6 shows a perfectly competitive labour market. The left-hand diagram shows the supply of labour (S_LI) and demand for labour (D_LI) for the industry. The right-hand diagram shows the demand for labour (D_LF) for one firm in the industry.

All other things being equal, which one of the following is most likely to cause an increase in the wage rate paid by the firm?

Figure 6 shows the supply of labour (S_L) and demand for labour (D_L) in a perfectly competitive labour market.

All other things being equal, which one of the following combinations would mean that wages in this labour market are likely to increase from W₁?

Which one of the following is most likely to affect the elasticity of demand for labour in a particular occupation?

The average university graduate can expect to earn more over their working life than the average school leaver.

This is most likely to be explained by

Explain how the data in Extract D (Figure 4) show that there is likely to be substantial upward pressure on the wages of care workers by 2041.

All other things being equal, the demand for labour is more likely to be wage elastic if

A large Asian steel-producing country dumps its surplus steel on the world market. All other things being equal, if the demand for steel is price elastic, the most likely consequence for the EU market for steel will be to

All other things being equal, which one of the following is most likely to cause the marginal revenue product of labour curve in the shoe manufacturing industry to shift to the right?

Extract E (lines 4–5) claims that workers in the 18th century saw wages rise in line with productivity.

With the help of a diagram, explain how advances in modern technology are likely to lead to rising wages in some industries.

Extract E (lines 22–23) states that ‘The tendency for women to participate in low-productivity sectors is now a bigger factor in their low pay than discrimination’.

With the help of a diagram, explain how the difference between the marginal revenue product of male and female workers might account for the lower average earnings of women.

The diagram below shows the market for bricklayers.

The original equilibrium wage is W₁ and the number of bricklayers employed is N₁. Which one of the following events is most likely to increase the wage paid to bricklayers to W₂ and increase employment to N₂?

The marginal revenue product of labour is the

sector.