A new technology company opens in Canada. It plans to employ software technicians. (a) What is meant by the price of labour? [1] (b) Which curve shows the q...
Question 1 Report
A new technology company opens in Canada. It plans to employ software technicians.
(a) What is meant by the price of labour? [1]
(b) Which curve shows the quantity of labour that workers are willing and able to offer at each wage rate? [2]
(c) Draw a labour-market diagram showing the equilibrium wage and equilibrium quantity of labour for software technicians. [2]
(d) Which change is most likely when several new technology firms begin to compete for the same technicians? [2]
(e) Draw a labour-market diagram to show the effect of an increase in demand for software technicians on the equilibrium wage and quantity of labour. [2]
(f) Calculate the weekly wage bill if the firm employs 120 technicians at a wage of C$18 per hour for a 35-hour week. [2]
(g) Which two factors could increase the demand for labour for software technicians? [2]
(h) What is meant by unemployment? [1]
(i) Which three factors may limit an increase in the supply of highly skilled software technicians in the short run? [3]
(j) Which policies are most likely to reduce skills shortages in the Canadian labour market? [3]
Answer Details
(a) The price of labour is the wage rate paid to workers. [1]
(b) The labour-supply curve shows the quantity workers are willing and able to offer at each wage rate. It normally slopes upward because higher wages encourage labour supply. [2]
(c) Equilibrium wage and employment occur where labour demand and supply intersect.
[2]
(d) Demand for technicians shifts right as firms compete for them. Equilibrium wage and employment tend to rise. [2]
(e) Demand shifts from D1 to D2; wage rises from W1 to W2 and employment rises from Q1 to Q2.
[2]
(f) \[120\times35\times\text{C\$}18=\text{C\$}75,600\text{ per week}\] [2]
(g) Any two: higher demand for technology products, higher labour productivity, a fall in employment costs, industry expansion or a higher output price. [2]
(h) Unemployment is when people willing and able to work, and actively seeking work, cannot find jobs. [1]
(i) Any three: lengthy qualification requirements, few experienced workers, geographical immobility, occupational immobility, imperfect information about vacancies, or high education and training costs. [3]
(j) Subsidised training and apprenticeships, STEM education, improved careers information, relocation support and targeted skilled immigration can increase the quantity and quality of labour supply. [3]
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