4.1.6.2(Influences on supply of labour to different markets)

• What does labour supply refer to?

  The number of hours people are willing to work at a given wage rate
• How does the opportunity cost of not working change with a wage rise?

  The opportunity cost of not working increases with a wage rise
• What is the relationship between wage levels and the ability of workers to supply their labour?

  Workers' ability to supply their labour increases with higher wage levels
• What is the shape of the labour supply curve for any industry?

  • The labour supply curve is upward sloping
  • Higher wages attract more workers
• What happens to the supply of labour when wages are lower than the equilibrium level?

  The supply of labour will exceed employers' demand, leading to unemployment
• What does the elasticity of labour supply measure?

  It measures the extent to which labour supply responds to a change in the wage rate in a given time period