Ruby Wong (29)
Bowood Kwok (14)
Ruby Wong (29)
Bowood Kwok (14)
Excess supply 2
P
S1
Excess supply 1
P1
Pe
D2
D1
Qd1
Qd2
Qs1
Q
Qs2
Labour
Explanation:
s
Firstly, the market wage that labours, wanted is higher than the equilibrium
price. Quantity supplied is greater than Quantity demanded (Qs1>Qd1). There is
an excess supply of labours. Therefore, unemployment is resulted.
But, as the news stated that “there was an improving consumer sentiment will
obviously boost consumption, which benefits the service sector, therefore create
more jobs” So, larger supply of labours is needed.
The demand for labours will increase. Market wage (P1) and quantity
supplied (Qs1) remain unchanged. Quantity demanded increases (Qd1->Qd2).
Therefore, excess supply decreases. (Excess supply1 -> Excess supply2)
Unemployment rate falls.
Ruby Wong (29)
Bowood Kwok (14)
P
P1
D1
Q1
Q2
D2
Q
Superior goods
Explanation:
Since it is mentioned that the jobless rate falls, more people have their own jobs.
The articles then states “brighter employment prospects for jobs seekers have led
to renewed confidence among shoppers.” That is when the people earn more income;
they would buy more goods like the furniture, plasma TVs and computers. Although
there are not any changes in price of such goods, the demand for them still rises.
Quantity transacted also increase.
These goods are called superior (normal) goods. An increase in income leads to
increase in demand for it, vice versa.