azizadil1998
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Hey everyone,

As you probably know the economics unit 2 is coming up, I am retaking AS as well as doing Units 3 and 4 - Unit 1 was quite easy, but last year I got an E in Unit 2, what is the best way to revise for this one? Also - what topics in unit 2 would you put more focus on; I was thinking mainly supply side demand side and balance of payments, as well as productivity/labour force (and how AD / AS is affected by those)
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Hot&SpicyChicken
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Can someone please explain to me how trade union powers is a supply side policies?Thanks, please rep and follow me!
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bigman69
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(Original post by Hot&SpicyChicken)
Can someone please explain to me how trade union powers is a supply side policies?Thanks, please rep and follow me!
1)Flexibility of markets.
To increase labour market flexibility is to limit the power of the trade union. HOW? well because trade unions resist in new working practices that could be increasing the firms productivity.
Also they try to increase the wages of labour which would is more expense to a firm, therefore they may result to employing less labour - increasing unemployment.

HOWEVER - trade unions could make markets more efficientHOW?

well trade unions are a representative for employees and so its much cheaper for the firm to communicate to just the trade union, rather each individual employee - decreasing a firms costs that allows them to obtain a higher profit to invest.
Also trade unions could be making decisions that makes labour more productive and efficient, but because their power is limited, the firm will not experience this.
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Hot&SpicyChicken
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(Original post by bigman69)
1)Flexibility of markets.
To increase labour market flexibility is to limit the power of the trade union. HOW? well because trade unions resist in new working practices that could be increasing the firms productivity.
Also they try to increase the wages of labour which would is more expense to a firm, therefore they may result to employing less labour - increasing unemployment.

HOWEVER - trade unions could make markets more efficientHOW?

well trade unions are a representative for employees and so its much cheaper for the firm to communicate to just the trade union, rather each individual employee - decreasing a firms costs that allows them to obtain a higher profit to invest.
Also trade unions could be making decisions that makes labour more productive and efficient, but because their power is limited, the firm will not experience this.

Thanks bigman69.
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