farming methods and the environmental and health side effects that these create. Government failure: The risk of government failure (such as inadequate information, administrative costs and market distortions) should be considered throughout. 13 Labour Market: Identify the main influences on Explanation of wages as the price of labour and that in a free market wages Wage demand and supply in labour are therefore determined by supply and demand. determination markets. Look at the demand for labour, discussing why firms need workers, and Understand determinants of the what will determine their demand link to technology, productivity, the – elasticity of the demand and supply demand for products and thus the state of the economy. Labour is therefore of labour. a derived demand and will be negatively correlated with wage rates. Understand the causes and Identify the main influences on demand and supply in labour markets. implications of wage differentials. Optional: Marginal revenue product theory is not required at AS but learners should understand that the demand for labour is derived from the contribution that labour to the profit of the firm. 14 Labour Market Understand the factors affect Make clear that labour supply consists of those actively looking for work Issues: flexibility in labour markets, for (not the supply of jobs). Again discuss the factors that will be likely to affect example trade union power, this wage levels, benefit levels, societal attitudes towards gender roles – regulation, welfare payments and (participation rates), migration, tax levels, education and so on. Hence income tax rates. supply will be positively correlated with wages, but strongly influenced by a range of other factors. Evaluate the effects of the statutory national minimum wage on labour markets.
farming methods and the environmental and health side effects that these create. Government failure: The risk of government failure (such as inadequate information, administrative costs and market distortions) should be considered throughout. 13 Labour Market: Wage determination Identify the main influences on demand and supply in labour markets. Understand determinants of the elasticity of the demand and supply of labour. Understand the causes and implications of wage differentials. Explanation of wages as the price of labour and that in a free market wages are therefore determined by supply and demand. Look at the demand for labour, discussing why firms need workers, and what will determine their demand – link to technology, productivity, the demand for products and thus the state of the economy. Labour is therefore a derived demand and will be negatively correlated with wage rates. Identify the main influences on demand and supply in labour markets. Optional: Marginal revenue product theory is not required at AS but learners should understand that the demand for labour is derived from the contribution that labour to the profit of the firm. 14 Labour Market Issues: Understand the factors affect flexibility in labour markets, for example trade union power, regulation, welfare payments and income tax rates. Evaluate the effects of the statutory national minimum wage on labour markets. Make clear that labour supply consists of those actively looking for work (not the supply of jobs). Again discuss the factors that will be likely to affect this – wage levels, benefit levels, societal attitudes towards gender roles (participation rates), migration, tax levels, education and so on. Hence supply will be positively correlated with wages, but strongly influenced by a range of other factors.
Eduqas%20Economics%20Course%20Outline%20(from%20September%202015).docx