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# F583 - Economics of Work and Leisure - June 2014 watch

1. (Original post by thunguyen168)
In the diagram, there is a 45° line, this line represents perfect income equality. That is when 10% of the population earn 10% of total income, 30% of population earn 30% of total income and so on. The actual state of income shares is the line below that "perfect equality" line. I'm using the diagram in the text book, so as you can see, the bottom 20% of the population earn approximately 5% total income. 80% of population earn 50%, 100% earn 100%, this shows that the top 20% of the population earn up to 50% total income. => income inequality.

I hope it makes sense.

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Hi, there in the textbook it mentions percentiles as well, how do these help to measure it? Thanks

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2. Are there any leisure market examples of a monopoly?
3. (Original post by Nash96)
Hi, there in the textbook it mentions percentiles as well, how do these help to measure it? Thanks

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Not sure about that. Sorry. But if anybody knows, do explain.

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4. (Original post by thunguyen168)
Not sure about that. Sorry. But if anybody knows, do explain.

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Ok I'll figure it out eventually xD

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5. This is probably really simple to everyone else, but how can a firm have higher unit labour costs but lower average total costs than another if they use more capital more efficiently? Surely even if they use more capital having higher labour costs per unit still pushes up the price hugely?

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6. (Original post by Nash96)
This is probably really simple to everyone else, but how can a firm have higher unit labour costs but lower average total costs than another if they use more capital more efficiently? Surely even if they use more capital having higher labour costs per unit still pushes up the price hugely?

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It depends upon how much total labour costs make up of total costs. If it is a capital-intensive industry then they will be contribute a fairly insignificant percentage. So even if labour costs are high they won't contribute much towards total costs and thus not push up the price by much.
7. (Original post by Waloo)
It depends upon how much total labour costs make up of total costs. If it is a capital-intensive industry then they will be contribute a fairly insignificant percentage. So even if labour costs are high they won't contribute much towards total costs and thus not push up the price by much.
I get it like that, but the textbook says a firm can have HIGHER unit labour costs than another firm but still have lower total costs...I just don't get how this is possible
8. I've done the Jan 2011 paper just now and I'm not sure whether my answers are relevant. The mark scheme isn't helping either; "State and explain two possible reasons which could account for the fall in employment in manufacturing (4) "

1) Manufacturing may have become increasingly capital incentive where fewer workers are required to produce goods; electrical machinery now carries out most of the work. Workers must be laid-off.
2) Certain areas of manufacturing in the UK may be in decline where production may be taken abroad and carried out in foreign countries. Domestic workers are laid-off and left unemployed.

Anyone correct this for me or suggest other options? Thanks.

Edit: I meant January 2011 for the paper. Ooops!
9. (Original post by Kuchkuchhotahai)
I've done the Jan 2010 paper just now and I'm not sure whether my answers are relevant. The mark scheme isn't helping either; "State and explain two possible reasons which could account for the fall in employment in manufacturing (4) "

1) Manufacturing may have become increasingly capital incentive where fewer workers are required to produce goods; electrical machinery now carries out most of the work. Workers must be laid-off.
2) Certain areas of manufacturing in the UK may be in decline where production may be taken abroad and carried out in foreign countries. Domestic workers are laid-off and left unemployed.

Anyone correct this for me or suggest other options? Thanks.
I dont think that is Jan 2010. But I did that paper and I remember I wrote something like because there is an decrease in demand for physical and manufactured products as they can be easily imported at a cheaper price. Therefore demand for labour decreases, leading to a fall in employment in the manufacturing industry.

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10. 'Analyse how changes in the degree of income inequality in an economy can be measured'
Could someone please explain how you'd answer this, my teacher never actually taught us this...
11. (Original post by Shepherd_9)
'Analyse how changes in the degree of income inequality in an economy can be measured'
Could someone please explain how you'd answer this, my teacher never actually taught us this...
Just show how they measure inequality through the Lorenz curve and the gini coefficient

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12. please can someone send me their revision notes
13. (Original post by thunguyen168)
I dont think that is Jan 2010. But I did that paper and I remember I wrote something like because there is an decrease in demand for physical and manufactured products as they can be easily imported at a cheaper price. Therefore demand for labour decreases, leading to a fall in employment in the manufacturing industry.

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Haha you're right, it's the January 2011 paper!

Ahhhh yes, derived-demand for Labour could be a better approach. Thank you

How're you getting on with the rest of the unit?
14. (Original post by Kuchkuchhotahai)
Haha you're right, it's the January 2011 paper!

Ahhhh yes, derived-demand for Labour could be a better approach. Thank you

How're you getting on with the rest of the unit?
I was having a stack of past papers in front of me

It is horrible, i'm alright with terms and concepts but those essay questions, ughhhhh, especially when there is an overlap between a) and b), I have no idea how to do it without sounding like repeating myself.
15. (Original post by thunguyen168)
I was having a stack of past papers in front of me

It is horrible, i'm alright with terms and concepts but those essay questions, ughhhhh, especially when there is an overlap between a) and b), I have no idea how to do it without sounding like repeating myself.
Haha I know what you mean, there's a few Labour Market failure essays that are put forwards like that..

Throw a random topic at me, I wanna go over it tonight! (something Labour-Market related preferably)
16. (Original post by Kuchkuchhotahai)
Haha I know what you mean, there's a few Labour Market failure essays that are put forwards like that..

Throw a random topic at me, I wanna go over it tonight! (something Labour-Market related preferably)
Hm, try this: "Discuss the extent to which non-pecuniary benefits may affect the supply of labour to various occupations." One of the essay questions I havent done so I'd love to have a model structure to learn

And then there is this essay question I have utterly no idea how to do "Analyse how the concepts of diminishing returns and diseconomies of scale can be applied to leisure markets." Help yourself
17. (Original post by thunguyen168)
Hm, try this: "Discuss the extent to which non-pecuniary benefits may affect the supply of labour to various occupations." One of the essay questions I havent done so I'd love to have a model structure to learn

And then there is this essay question I have utterly no idea how to do "Analyse how the concepts of diminishing returns and diseconomies of scale can be applied to leisure markets." Help yourself
I shouldn't have asked... Hahaha I'll try tonight!
18. Does anyone know how to answer the 15 markers
19. Also I understand changes in mr/mp lead to a shift in Mrp but what factors cause changes in mr/mp?
20. "Using the information in Fig 2, Discuss the extent to which the changes in the age profile of the labour supply are likely to benefit the UK economy. " [8] - January 2011

"Changes in the age profile of the labour supply can benefit the UK economy in ways such as a reduced burden on the govt. of handing out pension-related payments.
Fig. 2 shows a relationship whereby the age profile of the workforce is expected to increase; greater numbers of people are expected to carry on working past retirement-age (65+) This means the government will be paying less retirement-related pensions and benefits. As well as this, the government will be able to collect more tax revenue through the incomes of those 'over-65' who choose to carry on working. This is through income tax.
However, it can be said that an ageing population may restrict the competitiveness of UK products and services. This is because older workers may still employ 'old-fashioned' methods of producing goods/services. This will not minimise costs of production, or increase the quality of products due to additional factors of production such as 'advanced technology machinery' not being employed to carry out the production process. In addition, little space will be left for the younger generation to seek employment due to greater numbers of older people staying on to work. This will reduce opportunities for younger people which in turn may create the Hysteresis effect or even possibly reduce levels of enterprise levels within markets. Fewer people are being given the chance to exercise new ideas as businesses are less willing to take them on, increased quality of products/services is reduced.

In conclusion, an ageing population brings fewer benefits than it brings challenges for the UK economy. An additional problem of net-migration may occur whereby workers (mainly young people) may seek employment abroad, this will reduce the supply of labour and create labour market failure"

Guys what mark would you give me, and if so what more could I discuss/add?

I understand it's slightly bothering putting everything in "essay format" but I will reduce future answers to bullet-points next time. Thanks again.

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