(a) Why should high unemployment be a matter of concern for business? (b) Explain how the supply and demand curves of labour are derived in the standard model. Comment on the realism of the model’s...

(a) Why should high unemployment be a matter of concern for business?

(b) Explain how the supply and demand curves of labour are derived in the standard model. Comment on the realism of the model’s assumptions relating to the labour market. (b) Show how technological progress might affect the labour market in this model.

(c) ‘Unemployment is high because wages are too high and employees are pricing themselves out of a job’ (business economist). ‘Reducing pay and employing people in low-wage jobs will depress national spending and make unemployment even worse’ (trade union official). Evaluate these two opposing views of the unemployment problem.

A national minimum wage has been introduced by many countries as a solution to the problem of ‘underpaid’ workers. How would you expect such a measure to affect the level of unemployment?