1.6.3 The determination of relative wage rates and levels of employment in competitive and non-competitive markets

• What are relative wage rates?

  Wages compared across occupations
• What is a non-competitive labour market?

  Few buyers or sellers
• Equilibrium wage rates in competitive markets are determined by the intersection of demand and supply
• Non-competitive labour market structures include monopolies and oligopolies.

  True
• What is compared in competitive and non-competitive labour markets?

  Wage rates and employment levels
• Government regulations can influence wages and employment in the labour market
• A higher demand for workers in a specific occupation leads to higher relative wage rates
• In a competitive labour market, wages are determined by the interaction of supply and demand.


  True
• What is the key difference in wage determination between competitive and non-competitive labour markets?

  Market power vs. supply and demand
• Relative wage rates are influenced by the interaction of supply and demand
• In a non-competitive labour market, wages are influenced by market power
• Relative wage rates are determined by the interaction of supply and demand for labour.


  True
• What do relative wage rates define in the labour market?

  Wages of different occupations compared
• Match the wage rate type with its definition:

  Relative Wage Rates ↔️ Wages of different occupations compared

  Absolute Wage Rates ↔️ Actual monetary amounts paid
• In a non-competitive labour market, there are many buyers and sellers.

  False
• In a non-competitive labour market, wages are influenced by the market power of either employers or workers
• Match the labour market type with its example:

  Competitive ↔️ Retail, fast food, entry-level jobs

  Non-Competitive ↔️ Unionized industries, specialized professions
• What are the determinants of the supply of labour in a competitive market?

  Wage rates, job satisfaction
• The equilibrium wage is the wage rate at which the quantity of labour demanded equals the quantity of labour supplied
• In a competitive labour market, employment levels are influenced by both supply and demand.


  True
• Match the labour market factor with its impact on employment:

  Increased Productivity ↔️ Higher employment

  Increased Supply ↔️ Lower wage rates
• What do relative wage rates help analyze in the labour market?

  Wage differentials
• A competitive labour market is one where there are many buyers (employers) and many sellers (workers) of labour
• What is the primary difference between a competitive and a non-competitive labour market?

  Market power
• In a non-competitive labour market, wages are influenced by market power rather than solely by supply and demand.


  True
• Equilibrium wage rates in competitive markets are determined by the interaction of labour supply and demand
• What is the primary effect of a monopoly in the labour market on wages?

  Lower wages
• An oligopoly in the labour market may lead to wage stagnation or lower wage growth for workers.


  True
• How many employers are in a competitive labour market?

  Many
• Competitive labour markets have higher employment levels compared to monopolies


  True
• What type of wage disparity exists in a competitive labour market?

  Minimal
• A monopoly employer can exploit market power to set wages below competitive levels

  True
• Match the labor market structure with its key characteristic:

  Monopoly ↔️ Single employer

  Oligopoly ↔️ Few dominant employers

  Competitive ↔️ Many employers and workers
• Non-competitive labor markets result in greater wage disparities compared to competitive markets


  True
• Relative wage rates compare wages across different occupations
• Match the wage rate type with its definition:

  Relative wage rate ↔️ Wages of different occupations compared

  Absolute wage rate ↔️ Actual monetary amounts paid
• In a competitive labor market, wages reflect worker skills and education


  True
• Unions in non-competitive labor markets can negotiate wages not fully dictated by market forces


  True
• Match the wage determination method with the labor market type:

  Influenced by market power ↔️ Non-Competitive

  Determined by supply and demand ↔️ Competitive
• The labor demand curve slopes downward due to diminishing returns


  True