3.3 Workers (chapter 18)

Question 1

Wage rate definition

Answer 1

Payment received by a worker per unit of time worked or unit of output produced

Question 2

Piece rate definition

Answer 2

When a worker is paid per unit of output produced

Question 3

Time rate definition

Answer 3

When a worker is paid per hour worked

Question 4

Commission definition

Answer 4

When a worker receives a small percentage of the value of the sales they make

Question 5

Minimum wage definition

Answer 5

A legally set minimum amount that a worker can be paid per hour

Question 6

Wage differential definition

Answer 6

The difference in wages between different workers

Question 7

Elasticity of demand for labour definition

Answer 7

The responsiveness of labour demand to a change in the wage

Question 8

Elasticity of supply of labour definition

Answer 8

The responsiveness of labour supply to a change in the wage

Question 9

Specialisation definition

Answer 9

When a worker, firm or economy concentrates on particular products or tasks

Question 10

Division of labour definition

Answer 10

Workers specialising on particular tasks

Question 11

Industrial action definition

Answer 11

Action taken by workers to disrupt production and put pressure on employers to agree to demands

Question 12

What does wage factor refer to?

Answer 12

The pay on offer having a big influence on what job a person decides to do.

Question 13

Why does the time rate system benefit the employer? worker?

Answer 13

as they can easily estimate their labour costs

workers can bargain collectively about the rate paid.

Question 14

Whats a disadvantage of the time rate system?

Answer 14

It does not reward hard work since it pays lazy and industrious workers the same.

Question 15

Whats the requirement for the piece rate system to work?

Answer 15

if a worker’s output can be easily measured and the product is standardised.

Question 16

in what industries is piece rate system used? which industries don’t use it?

Answer 16

used in manufacturing and agriculture

not used in the service sector

Question 17

How can overtime pay benefit employers? Employees?

Answer 17

Employes can respond to higher demand without taking on new workers, until they are sure that the higher demand will last.

if demand declines, its easier to reduce overtime than to sack workers.

Question 18

Disadvantages of overtime pay?

Answer 18

There’s a risk that workers may become tired

output they produce over the day may not increase and even its quality may fall

Question 19

What are some non-wage factors of the supply of labour?

Answer 19

-job satisfaction
- type of work
-working conditions
-Working hours
-Holidays
-Pensions
- fringe benefits
- Job security
-career prospects
-size of the firms
- location

Question 20

Manual work vs. Non manual work

Answer 20

Non manual work

-physically less tiring
-offers more metal stimulation
-tends to be better paid
-tends to lead to higher status

manual work

-some people are prepared to undertake dangerous work e.g deep sea diving

Question 21

What are pensions?

Answer 21

Financial help post unemployment.

Question 22

What are fringe benefits

Answer 22

Extra benefits provided to workers by heir employers

e.g free/subsidised meals, health schemes

Question 23

What are some limiting factors to an individuals choice in occupation

Answer 23

skills and education-
opportunity cost

the more occupationally/ geographically mobile workers are, the wider the choice of occupation available

Question 24

What are factors affecting labour supplied

Answer 24

-The level of skill, training, education and qualifications required

-non wage factors affecting how apealing an occupation is

-non-wage and wage factors affecting how appealing OTHER occupations are

(Wage doesn’t shift labour supplied.)

Question 25

Factors affecting labour demanded

Answer 25

-Size and profitability of the industry- "derived demand" productivity of workers High productivity-> high demand Availability and cost of capital- if capital is USED by workers (compliment) , capital is cheap-> high demand for workers If capital can REPLACE workers (substitutes) , cheap capital-> low demand for workers

Question 26

How can powerful monopsonies affect wages?

Answer 26

A monopsony is a market situation where a single buyer (often an employer) has significant control over purchasing labor or goods. This can lead to lower wages, as workers have less bargaining power.

Question 27

What can minimum wage counter

Answer 27

monospony power

Question 28

What are public sector wages? How do they affect wages

Answer 28

salaries paid to employees of government-run organisations by setting benchmarks for private sector pay and affecting labor market competition.

Question 29

What are determinants of Elasticity of Labour Demanded?

Answer 29

The proportion of a firm's costs taken up by labour costs How easily labour can be substituted with capital The time period

Question 30

What are determinants of Elasticity of Labour Supplied?

Answer 30

The skills and qualifications and length of training required The mobility of labour The time period

Question 31

what are the advantages of specialisation and division of labour? (for firms)

Answer 31

repetition leads to higher skill and an increase in speed and quality. Thus, output per worker increases thus Lower cost per unit produced Training can happen quickly as well

Question 32

How might specialisation result in higher unit costs? (disadvantage for firms)

Answer 32

- Workers may get bored doing the same task each day -boredom causes mistakes -people may take more days off and this increases. dependence on other workers to cover absences

Question 33

what are the advantages of specialisation and division of labour? (for workers)

Answer 33

-Workers can earn high wages if their skills are in high demand -Enables them to pursue specific interests -Reduces pressure on workers

Question 34

What are disadvantages of specialisation for workers?

Answer 34

Demand for their services may fall as they are occupationally immobile Finding another job will be harder