University:
McMaster University
Course:
ECON 1BA3 | Introductory Macroeconomics for Economics Students
Academic year:

2024
Views:

363

Pages:

2
Author:

Sabrina S.

South Africa's Labour Market Blue white-collar workers Professional ppl (lawyers) Owners of small businesses Note: Labour refers to After 1994, SA had to address racial inequalities New legislation was introduced which had a big impact on SA labour market LRA - labour relations act ACEA - basic conditions of employment act DCEA - employment equity act SOA - skills development act Purely Competitive Labour Market In this market: Numerous firms compete with one another in hiring specific types of labour Qualified workers with identical skills supply that labour Individual firms & workers are 'wage takers', neither can control the market wage rate What determines wage rate? Demand + Supply Labour Market Equilibrium Labour demand & supply in a purely comp. market Diagram with axes labeled "Quantity of Labour" and "Wage Rate" Demand curve slopes downward Supply curve slopes upward Equilibrium point labeled "E" Labour demand & supply for a single comp. firm Diagram with axes labeled "Quantity of Labour" and "Wage Rate" Supply curve labeled "MRC" is perfectly elastic Demand curve labeled "MRP" slopes downward Equilibrium point determined by where MRC = MRP Shaded area labeled "Firm's total revenue" Wage cost (firm's total cost) Equilibrium determined by demand + supply Equilibrium determined by where MRC = MRP MRC - marginal revenue cost MRP - marginal revenue product Firm employs units of labour non-labour cost wage cost (firm's total cost) Individual firms' demand for labour In economic terms: Each individual firm finds it profitable to hire labour up to the point where MRCI MAP or wage rate MRP Marginal resource cost Marginal resource product extra cost of hiring an additional extra revenue earned on additional employee