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F583 - Economics of Work and Leisure - June 2014
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Original post by Kuchkuchhotahai
I feel so happy you two are doing F583, lets get this thread up in levels with the F585 one!
not sure if thats even possible, that f585 one was ACTIVE. at the minute its just leisure markets and migration/NMW that i need to go over and learn haha, although this is the exam which i feel like im better prepared for.
Original post by Fas
likewise haha, did a mock in this and got 56/60, so i will be mightily pissed off if i can't get an a* in this one!
probably revised for this one the most, although i still need to revise the leisure markets section - one of those "Discuss the extent to which a leisure market of your choice is an oligopoly" would be peeerrrffeeecccttt
probably revised for this one the most, although i still need to revise the leisure markets section - one of those "Discuss the extent to which a leisure market of your choice is an oligopoly" would be peeerrrffeeecccttt
Second that!
Original post by Fas
likewise haha, did a mock in this and got 56/60, so i will be mightily pissed off if i can't get an a* in this one!
probably revised for this one the most, although i still need to revise the leisure markets section - one of those "Discuss the extent to which a leisure market of your choice is an oligopoly" would be peeerrrffeeecccttt
probably revised for this one the most, although i still need to revise the leisure markets section - one of those "Discuss the extent to which a leisure market of your choice is an oligopoly" would be peeerrrffeeecccttt
I only managed 54 for my mock 
. Fas is the chosen one!
Original post by Fas
not sure if thats even possible, that f585 one was ACTIVE. at the minute its just leisure markets and migration/NMW that i need to go over and learn haha, although this is the exam which i feel like im better prepared for.
Yeah I guess so but lets make an effort to get discussions going.. 60% of my revision for F585 was TSR, literally asking and answering questions on here was SO helpful.
So any ideas of what may come up?
I'm predicting Leisure Markets for data response, and wage differentials as a possible 15/20 marker... I know I've stated the obvious lol, but for the data response I've noticed there hasn't been much talk of Oligopolies.
Guys I scored 49... Help me please
Original post by Kuchkuchhotahai
Yeah I guess so but lets make an effort to get discussions going.. 60% of my revision for F585 was TSR, literally asking and answering questions on here was SO helpful.
So any ideas of what may come up?
I'm predicting Leisure Markets for data response, and wage differentials as a possible 15/20 marker... I know I've stated the obvious lol, but for the data response I've noticed there hasn't been much talk of Oligopolies.
So any ideas of what may come up?
I'm predicting Leisure Markets for data response, and wage differentials as a possible 15/20 marker... I know I've stated the obvious lol, but for the data response I've noticed there hasn't been much talk of Oligopolies.
that bolded bit applies to me so much as well! i would never really have understood those concepts like a currency peg, or balanced budget fiscal expansion without the help of that thread haha.
yeah, i think you may be right there. Im hoping leisure markets for data response and then a leisure markets essay as one of the options
that would be THE perfect examOriginal post by Pro Crastination I only managed 54 for my mock . Fas is the chosen one!
I only managed 54 for my mock . Fas is the chosen one!you better believe it
just kiddin haha, you'll probably beat me in the real thing 
Original post by Fas
that bolded bit applies to me so much as well! i would never really have understood those concepts like a currency peg, or balanced budget fiscal expansion without the help of that thread haha.
yeah, i think you may be right there. Im hoping leisure markets for data response and then a leisure markets essay as one of the options that would be THE perfect exam
yeah, i think you may be right there. Im hoping leisure markets for data response and then a leisure markets essay as one of the options
that would be THE perfect examI believe so too, and woah.. Wait I've always been told that Leisure markets can only come up once? Either as Data response and then questions on Labour Markets OR Labour Market Data response, 2 Labour Market questions and then 1 Leisure Markets question... By questions I mean essays.
Last years paper was on market failure chapter (Income Inequality) so I highly doubt that will be appearing as the data response. It could be on leisure markets (oligopolies)
Not sure as to what can pop up for the essays - hopefully nothing to do with trade unions.
Not sure as to what can pop up for the essays - hopefully nothing to do with trade unions.
Original post by Inevitable
Last years paper was on market failure chapter (Income Inequality) so I highly doubt that will be appearing as the data response. It could be on leisure markets (oligopolies)
Not sure as to what can pop up for the essays - hopefully nothing to do with trade unions.
Not sure as to what can pop up for the essays - hopefully nothing to do with trade unions.
Trade unions and monopsony stuff is nice. Fairly simple diagram to explain, lots of people don't know it, so it pushes the grade boundaries down Original post by Pro Crastination Trade unions and monopsony stuff is nice. Fairly simple diagram to explain, lots of people don't know it, so it pushes the grade boundaries down
Trade unions and monopsony stuff is nice. Fairly simple diagram to explain, lots of people don't know it, so it pushes the grade boundaries down haha are you alright to explain trade unions/monopsonies to me? i think i get it, just want clarification
Original post by Kuchkuchhotahai
I believe so too, and woah.. Wait I've always been told that Leisure markets can only come up once? Either as Data response and then questions on Labour Markets OR Labour Market Data response, 2 Labour Market questions and then 1 Leisure Markets question... By questions I mean essays.
oh right, didn't know that haha, i just assumed they could throw in anything there. In that case, i'd much rather data response be on the harder trade union/monopsony stuff, and the essay on leisure markets
Original post by Fas
haha are you alright to explain trade unions/monopsonies to me? i think i get it, just want clarification
Trade unions may be monopolies or oligopolies.
Trade unions are labour organisations that seek to promote the interests of their members by negotiating wages and working conditions on their members' behalf. By doing so, they make use of collective bargaining, which is more probable to ensure wage rises/improvements in working conditions, as opposed to individual employees negotiating for themselves - as such employees may lack persuasive skills, or may, on their own, not disrupt the production process by much if they were to strike.
Trade union power is determined by:
•
Proportion of workers for a firm who are members of that union.
•
Available funds.
•
Public support.
•
Degree of disruption industrial action creates.
•
Lower the rate of unemployment.
•
Degree to which legislation favours unions over employers.
Why trade unions are a market failure:
They may cause unemployment by taking advantage of their bargaining power to artificially push wages up. This pushes wages up from W to W1, which creates a disequilibrium in the labour market (otherwise known as a labour market failure). When this occurs, the quantity of labour employed decreases from Q to Q1, which creates additional unemployment. (You could also argue that they shift the supply curve left by forcing employers to require higher qualifications.)
Solutions:
1.
Toughen anti-union legislation.
2.
Strengthening employers' powers by reducing competition legislation - if companies gain labour market share, they will have a larger power to influence the wage rate.
3.
Trade unions themselves can create productivity agreements - whereby, the employer would agree to raise the wage rate, so long as workers train and improve their skills. Because of this gain of skills, the demand for this labour will increase, as their MRP would have increased due to higher productivity - so it will simply be a shift right in the demand curve for labour - raising wages and not creating unemployment.
---
Monopsony: a single buyer in a market. As the chapter is labour market failure, it's usually about a single buyer of labour: such as the NHS for nurses.
The monopsony's bargaining power can also be determined by the determinants listed above.
As profit maximisers (you may want to think about a private sector monopoly in this case, maybe supermarkets and checkout assistants or something), firms will employ workers up to the point where their MCL (wage rate), is equal to the MRP they bring in for the company. This can be displayed using a diagram:
As the monopsony is the only employer of this labour, labour units (how highly impersonal) know that they have no where else to look for employment, and so are effectively powerless in determining their wages. Thus, employers can pay an average wage of w (in the diagram), employing Q employees (employing up until MRP=MCL to profit maximise).
This is a market failure (I'm a little unsure here) as the amount of money labour units command for their efforts is lower than the equilibrium wage if there was perfect competition in the labour market.
Solutions
•
Enforcing more competition by enforcing tougher competition rules - whatever they are.
•
If it's the government, a solution would be privatisation.
•
Increasing the national minimum wage (only if the new NMW is higher than the wage currently paid to these employees).
If a NMW is applied that is above the wage the employees currently earn, then it will lead to an increase in both the wage rate (from W to W1) and the number of individuals employed - which would be more reflective of the labour market equilibrium in perfect competition.
---------
A bilateral monopoly can also exist. This is where there is a single supplier of labour and a single buyer. For instance, state school teachers and teaching unions. In this situation, this diagram can be used:
The wage will be somewhere between W and W1, depending upon the relative bargaining strength of the firm and the union. If, for instance, the union has a large degree of public sympathy for its efforts in striking, the firm might wish to concede and raise wages for fear of losing sales. This would lend the union more power, which would mean that the wage would likely be nearer to W1 than W. The wage will never increase above W1 because the firm would then no longer be employing up to the point where MRP=MCL (so it wouldn't be profit maximising).
---
So yeah, that's what I know about the two. I don't know if I have enough analytical points for a 15 marker on, say, why a trade union causes market failure. Unless I can stretch out the explanation of how they have power to determine wages in the first place, the actual analysis seems fairly simplistic.
(edited 9 years ago)
Hey, has any one got a copy of the F583 paper from last year - June 2013?
Original post by letsplayray
Hey, has any one got a copy of the F583 paper from last year - June 2013?
Here.
Hey guys,
How would you structure this: "Discuss the extent to which non-pecuniary benefits may affect the supply of labour to various occupations."
Posted from TSR Mobile
How would you structure this: "Discuss the extent to which non-pecuniary benefits may affect the supply of labour to various occupations."
Posted from TSR Mobile
Original post by Pro Crastination
Here.
Thanks mate!
Original post by Pro Crastination
Trade unions may be monopolies or oligopolies.
Trade unions are labour organisations that seek to promote the interests of their members by negotiating wages and working conditions on their members' behalf. By doing so, they make use of collective bargaining, which is more probable to ensure wage rises/improvements in working conditions, as opposed to individual employees negotiating for themselves - as such employees may lack persuasive skills, or may, on their own, not disrupt the production process by much if they were to strike.
Trade union power is determined by:
Why trade unions are a market failure:
They may cause unemployment by taking advantage of their bargaining power to artificially push wages up. This pushes wages up from W to W1, which creates a disequilibrium in the labour market (otherwise known as a labour market failure). When this occurs, the quantity of labour employed decreases from Q to Q1, which creates additional unemployment. (You could also argue that they shift the supply curve left by forcing employers to require higher qualifications.)
Solutions:
---
Monopsony: a single buyer in a market. As the chapter is labour market failure, it's usually about a single buyer of labour: such as the NHS for nurses.
The monopsony's bargaining power can also be determined by the determinants listed above.
As profit maximisers (you may want to think about a private sector monopoly in this case, maybe supermarkets and checkout assistants or something), firms will employ workers up to the point where their MCL (wage rate), is equal to the MRP they bring in for the company. This can be displayed using a diagram:
As the monopsony is the only employer of this labour, labour units (how highly impersonal) know that they have no where else to look for employment, and so are effectively powerless in determining their wages. Thus, employers can pay an average wage of w (in the diagram), employing Q employees (employing up until MRP=MCL to profit maximise).
This is a market failure (I'm a little unsure here) as the amount of money labour units command for their efforts is lower than the equilibrium wage if there was perfect competition in the labour market.
Solutions
If a NMW is applied that is above the wage the employees currently earn, then it will lead to an increase in both the wage rate (from W to W1) and the number of individuals employed - which would be more reflective of the labour market equilibrium in perfect competition.
---------
A bilateral monopoly can also exist. This is where there is a single supplier of labour and a single buyer. For instance, state school teachers and teaching unions. In this situation, this diagram can be used:
The wage will be somewhere between W and W1, depending upon the relative bargaining strength of the firm and the union. If, for instance, the union has a large degree of public sympathy for its efforts in striking, the firm might wish to concede and raise wages for fear of losing sales. This would lend the union more power, which would mean that the wage would likely be nearer to W1 than W. The wage will never increase above W1 because the firm would then no longer be employing up to the point where MRP=MCL (so it wouldn't be profit maximising).
---
So yeah, that's what I know about the two. I don't know if I have enough analytical points for a 15 marker on, say, why a trade union causes market failure. Unless I can stretch out the explanation of how they have power to determine wages in the first place, the actual analysis seems fairly simplistic.
Trade unions are labour organisations that seek to promote the interests of their members by negotiating wages and working conditions on their members' behalf. By doing so, they make use of collective bargaining, which is more probable to ensure wage rises/improvements in working conditions, as opposed to individual employees negotiating for themselves - as such employees may lack persuasive skills, or may, on their own, not disrupt the production process by much if they were to strike.
Trade union power is determined by:
•
Proportion of workers for a firm who are members of that union.
•
Available funds.
•
Public support.
•
Degree of disruption industrial action creates.
•
Lower the rate of unemployment.
•
Degree to which legislation favours unions over employers.
Why trade unions are a market failure:
They may cause unemployment by taking advantage of their bargaining power to artificially push wages up. This pushes wages up from W to W1, which creates a disequilibrium in the labour market (otherwise known as a labour market failure). When this occurs, the quantity of labour employed decreases from Q to Q1, which creates additional unemployment. (You could also argue that they shift the supply curve left by forcing employers to require higher qualifications.)
Solutions:
1.
Toughen anti-union legislation.
2.
Strengthening employers' powers by reducing competition legislation - if companies gain labour market share, they will have a larger power to influence the wage rate.
3.
Trade unions themselves can create productivity agreements - whereby, the employer would agree to raise the wage rate, so long as workers train and improve their skills. Because of this gain of skills, the demand for this labour will increase, as their MRP would have increased due to higher productivity - so it will simply be a shift right in the demand curve for labour - raising wages and not creating unemployment.
---
Monopsony: a single buyer in a market. As the chapter is labour market failure, it's usually about a single buyer of labour: such as the NHS for nurses.
The monopsony's bargaining power can also be determined by the determinants listed above.
As profit maximisers (you may want to think about a private sector monopoly in this case, maybe supermarkets and checkout assistants or something), firms will employ workers up to the point where their MCL (wage rate), is equal to the MRP they bring in for the company. This can be displayed using a diagram:
As the monopsony is the only employer of this labour, labour units (how highly impersonal) know that they have no where else to look for employment, and so are effectively powerless in determining their wages. Thus, employers can pay an average wage of w (in the diagram), employing Q employees (employing up until MRP=MCL to profit maximise).
This is a market failure (I'm a little unsure here) as the amount of money labour units command for their efforts is lower than the equilibrium wage if there was perfect competition in the labour market.
Solutions
•
Enforcing more competition by enforcing tougher competition rules - whatever they are.
•
If it's the government, a solution would be privatisation.
•
Increasing the national minimum wage (only if the new NMW is higher than the wage currently paid to these employees).
If a NMW is applied that is above the wage the employees currently earn, then it will lead to an increase in both the wage rate (from W to W1) and the number of individuals employed - which would be more reflective of the labour market equilibrium in perfect competition.
---------
A bilateral monopoly can also exist. This is where there is a single supplier of labour and a single buyer. For instance, state school teachers and teaching unions. In this situation, this diagram can be used:
The wage will be somewhere between W and W1, depending upon the relative bargaining strength of the firm and the union. If, for instance, the union has a large degree of public sympathy for its efforts in striking, the firm might wish to concede and raise wages for fear of losing sales. This would lend the union more power, which would mean that the wage would likely be nearer to W1 than W. The wage will never increase above W1 because the firm would then no longer be employing up to the point where MRP=MCL (so it wouldn't be profit maximising).
---
So yeah, that's what I know about the two. I don't know if I have enough analytical points for a 15 marker on, say, why a trade union causes market failure. Unless I can stretch out the explanation of how they have power to determine wages in the first place, the actual analysis seems fairly simplistic.
Hi, this is amazingly helpful, thanks!
Posted from TSR Mobile
Original post by Nash96
No worries
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