1. The labour market is similar to ...

2. Companies buy labour because they ...

3. Workers want higher...

4. When the price of labour rises ..

5. Four things that cause a change in demand for labour are ...

Supply of labour

Why do people work? To make money, of course. However, nothing in economics is ever that simple. The economist will ask a further question: how much are people prepared to work? The answer to this question is much more complex. Finding the right balance between work time and leisure time is one of the trade-offs we have to make in life. The balance each person chooses depends on a number of things.

First of all, there are natural limits. There are only 24 hours in a day, and we can't spend all of them working. Most people need eight hours sleep. That brings the number of hours we can spend on work or leisure down to 16. None of us are robots, so we all need some time to rest and switch off from work. This also brings down the possible number of working hours.

Then, of course, money plays a role. The way money influences working hours, though, is quite complicated. It can be separated into two effects: the income effect and the substitution effect.

The income effect works like this: People's time is a resource. If they give up that resource for work, they need compensation. This is usually in the form of a wage for hours worked. The more compensation they get for each hour worked, the less they will need to work. People with higher rates of pay (wages) can afford to have more leisure time than people on lower rates of pay.

So far, so good. However, are people happy just sitting at home and enjoying themselves? It depends on what they'll lose. In other words, it depends on the opportunity cost of not working. As the hourly rate for work increases, the cost of not working also increases. This means that as the wage rate increases, people want to work more hours. This is called the substitution effect. But the substitution effect also has a limit. Eventually, people will not work more hours, no matter how good the compensation is.

A good wage rate clearly attracts more workers, and encourages them to work longer hours. However, the strength of this relationship depends on how elastic the labour supply is. Sometimes it is difficult for companies to find a certain kind of worker. Perhaps there are not many people with the necessary skills. Or perhaps the company is in a place where there are not many available workers. In these situations, even if employers double the wage rate, they will only attract a small number of extra workers. The labour supply is inelastic. In the opposite situation, when it is easy for companies to find workers, the labour supply becomes elastic.

Переведите на английский язык:

1.    Рынок, где работодатели приобретают услуги рабочих за заработную плату, называется рынком труда.

2.    Увеличение выпуска продукции — это та полезность, которую получают работодатели от приобретения труда.

3.    Любой рынок, включая рынок труда, подчиняется закону спроса и предложения.

4.    Кривая спроса на труд может сдвигаться право, если спрос увеличивается, например, в результате роста производства, или влево, если спрос уменьшается из-за внедрения какой-либо новой технологии, которая может заменить рабочих.

5.    Один из компромиссов, на который мы идём в нашей жизни, — это поиск правильного соотношения между рабочим временем и временем отдыха.

6.    Природные ограничения, такие как сон и отдых, сокращают возможное количество рабочих часов. Нам нужно время, чтобы отключиться от работы, что также укорачивает рабочее время.

7.    При росте почасовой оплаты люди хотят работать больше — это называется эффект замещения. Но этот эффект также имеет предел.

Supply of labour

1. Complete each sentence with a word or phrase from the box.

balance       compensation complex

influences  leisure play a/an rate

role skills substitution switch off

1. At the weekend everyone needs to relax and … from school or work.

2. Employers … important … in the economy.

3. … is what you receive if you are badly affected by something.

4. … means replacing one thing with another.

5. Most people's … time is at the weekend and in the evenings.

6. It can be difficult to get the right … between work and free time.

7. The money you can earn … people's choice of job.

8. Some economic problems are very … .There is no easy solution.

9. The hourly … for this job is seven pounds an hour.

10. The ability to speak foreign languages is one of the … needed for this job.