4.1.6.2 Influences upon the supply of labour to different markets Quiz: AQA Economics, Unit 1

The 20 questions

1. The supply of labour to a particular occupation is influenced by:

   • Monetary considerations only, such as the wage rate
   • Both monetary and non-monetary considerations
   • Non-monetary considerations only, such as working hours
   • The government's minimum wage alone

2. Non-monetary considerations that affect labour supply include:

   • Interest rates on savings accounts
   • Job satisfaction and working conditions
   • The price of the product made by the firm
   • The wage rate and bonuses only

3. The supply curve for labour shows the relationship between:

   • The wage rate and the number of workers willing to work in an occupation
   • The wage rate and the number of workers employed by firms in the occupation, which records how many jobs employers have chosen to fill
   • Output and the number of hours worked per week, which records how much the occupation produces in a typical working week
   • The price of the product and the wage paid to the workers who make it, which records how the market for goods affects pay levels

4. A rise in the number of workers qualified for an occupation will shift the market supply curve for labour:

   • Upwards along the same curve
   • To the left, as fewer workers are willing to work at each wage
   • Not at all, since qualifications do not affect supply
   • To the right, as more workers are willing to work at each wage

5. Which change would shift the market supply curve for labour to the left?

   • A rise in the training required to enter the occupation
   • A rise in the wage rate for the same occupation
   • A fall in unemployment benefit that encourages more people to apply
   • A rise in the number of firms employing workers in the occupation

6. Job dissatisfaction within an occupation is most likely to:

   • Move the supply curve along itself with no change in supply, since dissatisfaction affects only the wage workers ask for in each period
   • Reduce the supply of labour to that occupation, shifting supply to the left
   • Increase supply to that occupation, shifting supply to the right
   • Have no effect on labour supply in any occupation, because workers never consider job satisfaction when they decide where to work

7. An occupation's wage rises from £20,000 to £24,000 and labour supply rises from 5,000 to 6,000 workers. Between these points, supply is:

   • Perfectly inelastic, since quantity does not change
   • Unit elastic, since quantity and wage rise by the same percentage
   • Perfectly elastic, since supply rises whenever the wage rises
   • Inelastic, since quantity rises less than the wage in absolute terms

8. A profession requires a seven-year training period. Why is its labour supply relatively inelastic in the short run?

   • The profession offers no non-monetary benefits at all
   • Training takes years, so the number of qualified workers cannot increase quickly in response to higher wages
   • Workers in the profession are paid a fixed salary regardless of how many hours they work
   • Workers can enter the profession instantly with no training

9. Which is the best explanation of why some high-wage occupations still face labour shortages?

   • Non-monetary disadvantages, such as hazardous or unsociable working conditions, reduce willingness to supply labour
   • Shortages only occur in perfectly competitive labour markets
   • High wages always attract workers quickly, so shortages cannot persist in any occupation
   • Trade unions always create surpluses of labour in every occupation

10. Which change would most directly shift the labour supply curve for an occupation?

    • A change in the wage rate in that occupation, which moves supply along its curve
    • A change in the non-monetary conditions or entry requirements of the occupation
    • A change in the number of workers firms demand at each wage
    • A change in the price of the final product made by firms

11. Which is a non-monetary consideration that could increase labour supply to nursing?

    • A rise in the price of medical equipment
    • A large cut in income tax on nursing salaries only, which lowers the tax bill of nurses but does nothing for conditions on the ward
    • Flexible working hours and a supportive working environment
    • A reduction in the number of nursing training places, which shrinks the pool of people who could qualify for work in the profession

12. Why might a rise in the wage for one occupation draw workers from another, and what does this imply for supply?

    • Wage rises always reduce labour supply in all occupations
    • Workers move between occupations, so supply to the high-wage occupation rises while supply elsewhere falls
    • Workers leave the labour force entirely whenever wages change
    • Workers never move between occupations

13. A rise in demand for a skilled occupation has what effect on its market supply curve?

    • A permanent shift of the demand curve to the left
    • A shift in the supply curve to the left
    • A fall in the wage as supply increases
    • No shift in the supply curve; the wage rises and quantity supplied moves along the curve

14. Why is the supply curve for labour usually upward sloping in a particular occupation?

    • Higher wages attract more workers, either entering the occupation or working more hours
    • The government sets wages at the same level for all workers, so the supply of labour cannot respond to changes in pay in any occupation
    • Firms demand more labour as wages fall, so employers want more workers when pay is low and fewer when pay rises in the market
    • Higher wages always reduce the number of workers willing to work

15. A profession with high job satisfaction tends to have a labour supply curve that is:

    • Further to the left at every wage
    • Vertical, since satisfied workers never change jobs, which means that the number of people supplying labour never responds to the wage
    • Downward sloping, since satisfaction lowers the wage that employers must pay to fill vacancies in the profession in each period
    • Further to the right at any given wage than in otherwise similar jobs with low satisfaction

16. Labour supply to an occupation can be relatively elastic in the long run if:

    • Workers can retrain or relocate to enter the occupation over time
    • Workers cannot change occupation under any circumstances
    • The wage is fixed by law and cannot respond to demand
    • Training periods are very long and cannot be shortened, which means that new entrants arrive slowly whatever the wage on offer to them

17. Which factor shifts the supply curve for labour to the right for an occupation?

    • A rise in the availability of suitable training places
    • A rise in the number of vacancies advertised in the occupation
    • A rise in the price of the product made by firms
    • A rise in the wage paid for that occupation

18. Which is an example of a monetary consideration affecting labour supply?

    • The level of pay, including bonuses and pension contributions
    • Flexibility of working hours, which allows workers to fit their jobs around family and other commitments in each week
    • Working conditions in a hot factory, where the heat and noise make the job harder to do over a full working shift
    • Job satisfaction and sense of purpose, which make a job feel worthwhile to the people who choose to work in it each day

19. A firm raises wages in an occupation to attract more workers. What happens to that occupation's labour supply?

    • Supply shifts to the left, since higher wages reduce worker willingness
    • Quantity of labour supplied rises, moving along the supply curve
    • Supply shifts to the right permanently regardless of the wage
    • Supply falls to zero, since workers prefer lower wages

20. Evaluate the claim that high wages are the only way to attract workers into an occupation.

    • Non-monetary factors, training costs and job security also matter, so wages alone may not attract enough workers
    • Wages have no effect on supply in any occupation
    • Only the government can influence labour supply through wages
    • High wages are the only factor

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