Work through the list without notes. If you cannot do a statement, follow its link, then come back. Guide = study guide; Practice = practice questions.
Understanding
- I can tell a change in the quantity of labour demanded or supplied (caused by the wage) from a change in demand or supply (a shift). (Guide: “Movements and shifts”; Practice Q1)
- I can explain how a change in the output price or in worker productivity shifts labour demand, using MRP = MP × P. (Guide: “What shifts labour demand”; Practice Q1, Q5)
- I can explain how the price of an input that substitutes for, or works with, labour affects labour demand. (Guide: “What shifts labour demand”)
- I can name the seven determinants of labour supply and give the direction of each shift. (Guide: “What shifts labour supply”; Practice Q2, Q7)
Calculation and graphing
- I can recalculate MRP after a change in output price or productivity and find how many workers are worth hiring at a given wage. (Guide: Worked example 1; Practice Q4, Q5)
- I can draw a correctly labelled labour market graph showing a shift of demand or supply and the new wage and quantity. (Guide: Figures 1 and 2; Practice Q6)
- I can find the equilibrium wage and quantity from linear demand and supply equations before and after a shift. (Guide: Worked example 2; Practice Q7)
Reasoning
- I can predict the effect of a single shift on the equilibrium wage and employment. (Practice Q2, Q6(a))
- I can explain which outcome is indeterminate when both curves shift, and what extra information would settle it. (Guide: “Two shifts at once: a summary”; Practice Q3, Q6(c))
- I can trace a change in a product market through to the labour market that produces it (derived demand). (Guide: Worked example 2(a); Practice Q6)
All ticked? Move on to Topic 5.3, Profit-Maximizing Behavior in Perfectly Competitive Factor Markets, or return to the course roadmap.