Lesson 5.2.1

5.2.1 Supply of labour, wage elasticity and economic rent Quiz: OCR Economics, Unit 5

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 5.2.1, Supply of labour, wage elasticity and economic rent: 20 multiple choice questions for the OCR Economics (H460), Unit 5: The labour market, written with Revision Ninja.

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The 20 questions

  1. What term describes the minimum payment required to keep a factor of production in its current occupation?

    • Opportunity cost
    • Economic rent
    • Transfer earnings
    • Producer surplus

  2. What term describes any earnings received by a worker above their minimum required wage?

    • Transfer earnings
    • Consumer surplus
    • Normal profit
    • Economic rent

  3. Which effect causes workers to supply more labour when wages rise because leisure becomes relatively more expensive?

    • Wealth effect
    • Substitution effect
    • Income effect
    • Output effect

  4. Which effect causes workers to cut working hours when higher wages allow them to achieve target income faster?

    • Fisher effect
    • Income effect
    • Substitution effect
    • Scale effect

  5. At very high wage levels, what shape does an individual worker's labour supply curve typically take?

    • Perfectly horizontal
    • Forward-sloping
    • Vertical
    • Backward-bending

  6. If the wage elasticity of supply of labour is greater than 1, how is labour supply classified?

    • Unit elastic
    • Perfectly inelastic
    • Wage elastic
    • Wage inelastic

  7. What is the wage elasticity of supply of labour if a 10% wage increase raises labour supply by 5%?

    • +2.0
    • +1.5
    • +0.2
    • +0.5

  8. If a worker earns £400 per week and their transfer earnings are £250, what is their economic rent?

    • £150
    • £650
    • £400
    • £250

  9. If a worker earns £600 per week and their economic rent is £200, what are their transfer earnings?

    • £800
    • £200
    • £400
    • £600

  10. When the supply of labour is perfectly elastic, what is the value of economic rent?

    • Infinite
    • Zero
    • Maximum
    • Total wage

  11. When the supply of labour is perfectly inelastic, what proportion of total earnings is economic rent?

    • 0%
    • 50%
    • 100%
    • 25%

  12. Which factor would cause an industry's supply curve of labour to shift to the right?

    • Higher entry qualifications
    • Stronger trade unions
    • Improved working conditions
    • Lower fringe benefits

  13. Which type of job typically has the most wage inelastic supply of labour in the short run?

    • Temporary office cleaner
    • Unskilled supermarket cashier
    • Highly skilled surgeon
    • Seasonal fruit picker

  14. How is the Wage Elasticity of Supply of Labour (WESL) calculated?

    • % Δwage / % ΔQs
    • % Δwage / % ΔQd
    • % ΔQd / % Δwage
    • % ΔQs / % Δwage

  15. On a standard labour market diagram, which area represents transfer earnings?

    • Left of supply
    • Below supply curve
    • Above supply curve
    • Above demand curve

  16. On a standard labour market diagram, which area represents economic rent?

    • Above supply curve
    • Below supply curve
    • Right of supply
    • Below demand curve

  17. What happens to economic rent when demand increases for a profession with completely inelastic labour supply?

    • It increases
    • It decreases
    • It stays zero
    • It becomes negative

  18. Which factor increases the short-run wage elasticity of supply of labour for a specific industry?

    • High specialised skills
    • Strict geographical immobility
    • Short training periods
    • Long qualification times

  19. What condition causes an individual worker's supply curve of labour to slope backwards?

    • Income effect > substitution
    • Scale effect > income
    • Income effect = substitution
    • Substitution effect > income

  20. What term describes the willingness and ability of individuals to offer their services to employers?

    • Marginal revenue product
    • Derived demand
    • Supply of labour
    • Demand for labour

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