Basics of Labour Markets Demand for Labour Supply of Labour Wage Determination Marginal revenue product of labour Labour market imperfections Monopsony diagram Labour Market Imperfections Monopsony Trades unions Geographical immobiliities Discrimination in the labour market Government intervention in labour markets Minimum wages Minimum wages Minimum Wages for 16-18 year olds Disadvantages of minimum wages Would …
Demand side policies include expansionary fiscal and monetary policies. For example, the govt could increase Govt spending and lower taxes. G is a component of AD, therefore, this will cause AD to increase, there may also be a multiplier effect causing AD to increase even more than the initial effect Lower tax rates will increase …
Aggregate demand (AD) is the total demand for goods and services produced within the economy over a period of time. Aggregate demand (AD) is composed of various components. AD = C+I+G+ (X-M) C = Consumer expenditure on goods and services. I = Gross capital investment – i.e. investment spending on capital goods e.g. factories and …
Income is a flow. It measures the receipt of money per period of time ( e.g. £200 a week) Wealth is a Stock. It measures the value of a person’s wealth at a given point in time e.g. £150,000 Distribution of income in the UK This shows the top 10% of income earners earnt over …
Definition of Budget constraints A budget constraint occurs when a consumer is limited in consumption patterns by a certain income. When looking at the demand schedule we often consider effective demand. Effective demand is what people are actually able to spend given their limitations of income. Temporary budget constraints can be overcome by borrowing, but …
Average cost (AC) is the total cost (TC) divided by quantity. AC= TC/Q Average variable cost (AVC) is the total variable cost (VC) divided by quantity AVC = VC/Q FC = Fixed costs – not changing with output VC = Variable costs – which do change with output TC Total costs = FC+VC Short-run average …
Aggregate supply is the total value of goods and services produced in an economy. The aggregate supply curve shows the amount of goods that can be produced at different price levels. When the economy reaches its level of full capacity (full employment – when the economy is on the production possibility frontier) the aggregate supply …
Readers Question: Why are more students going to university, despite the increased costs associated with higher education The number of students in full time education has dramatically increased in the past few decades. In the 1960s and 1970s, a full time university degree was a minority choice, but it has become increasingly popular. It is …