Class notes
Regulation
- Course
- Institution
- Book
Regulation by governments
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
Seller
Follow
simran_js21
Content preview
The Demand for LabourSyllabus:
Wage (£/hour)
DL =f(W)
The higher the price of labour (wage per
hour), the less will be employed.
W1
W
D
0 q1 q Q
Derived demand – the demand for labour as a factor of production is dependent on the demand for a product or service.
LONG RUN (when all factors of production are variable)
In the long run the labour demand curve slopes downward because of the substitution effect. Capital can be substituted for
labour if the relative price of capital per unit of output is less than labours.
In the developing world the relative price of labour (L) < capital (K), therefore industries tend to be labour intensive.
In the developed world the relative price of L > K and so industry is capital intensive (rapid advances in technology)
Structural change in the UK has changed the pattern of employment. Jobs in the primary and secondary sector have fallen,
those in the tertiary and quaternary (information services) sector have risen.
Many new jobs have been created in the leisure and tourism industry, as well as IT, business and financial services.
Causes of structural change include:
1. International competition / globalisation based on comparative advantage and NICs
2. Rising incomes – increasing the demand for income elastic services
3. Technological advance - rapid growth of the quaternary sector.
SHORT RUN (when at least one factor of production is fixed)
In the short-run the demand curve for labour slopes downward due to the law of diminishing returns
It is assumed that the capital stock is fixed (factory and office space, plant, machinery and equipment).
More of the variable factor (labour) is applied to the fixed factor (capital) and although, through specialisation and the division
of labour, productivity initially increases, eventually diminishing returns set in and wages have to fall to persuade the employer
to take on an additional worker.
Per week
1 2 3 4 5 6 7
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller simran_js21. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $12.10. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
50843 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now