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3.5.2 SUPPLY OF LABOUR, image, x axis= hours worked
y axis = wage rate.
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3.5.2 SUPPLY OF LABOUR
WHAT DOES SUPPLY OF LABOUR SHOW:
shows the willingness and ability of people to be available to work at each wage rate
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x axis= hours worked
y axis = wage rate.
At lower wages substitution effect is bigger
At higher wages income effect is bigger.
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GEOGRAPHIC IMMOBILITY- When the worker will not move to another area where employment is higher.
Causes: Family ties, children moving, lack of info.
OCCUPATIONAL MOBILITY-
When the worker has a lack of transferrable skills.
Causes: desire and ability to retrain.
CONTEXT: the UK suffers from a severe skill shortage that costs 90bn a year as there is a lack of engineers.
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