1. 1. Understand the role and operation of labour market.
3.5 Rewards for labour
1. Understand the role and operation of labour market.
2. Understand differences between gross and net income and nominal and real income.
3. Understand wage determination using simple demand-and-supply analysis

2. Wage & Salary
Wage – Individual payment usually for a weeks work. Per Hour
Salary – Individual payment usually for a month. Amount per year, 12 equal payments.

3. Gross & Net Income
Gross income - All income before deductions. Net income – Gross income - deductions. Nominal income is income paid, unadjusted by inflation. Real income is income paid adjusted to inflation.

4. The labour market
This is the interaction between workers and employers. Made up of demand and supply of labour and where they meet is the market wage rate.
Draw graph page 41.

5. How wages are determined?
1. labour derived from demand. Product demand goes up so does labour demand.
Inverse relationship between demand for labour and wage rate. Higher the wage the fewer workers likely to be employed.
Supply of labour is the total number of workers willing to work at that rate.
Equilibrium wage rate is determined by interaction of D & S. Change in either DL or SL will change both the wage and level of employment.

6. Discuss the changes increase for Labour demand increasing – curve shifts right and labour supply – curve shifts right.
Last point – printers, specialised job, demand in wages eventually lead to mass unemployment as disequilibrium.