Which of the following statements about the Labour Market is/are true ? (a) Like a commodity market,…
Unlike a commodity market where the buyer-seller transaction is impersonal and temporary, the employment relationship in a labour market is personal and continuing, so…
Choose your answer
Which of the following statements about the Labour Market is/are true ?
(a) Like a commodity market, the relationship between a buyer and a seller in a labour market is temporary.
(b) There is a diversity of wage rates in a labour market even for similar nature of work.
(c) Monopoly in the labour market is extremely rare.
(d) Monospony referring to the buyer’s control is more in the labour market.
Answer and explanation
Correct answer A
Unlike a commodity market where the buyer-seller transaction is impersonal and temporary, the employment relationship in a labour market is personal and continuing, so statement (a) is false. Statements (b), (c) and (d) are true: wage rates vary for similar work due to market imperfections, pure monopoly on the labour supply side is rare, and employer monopsony power is much more common. Hence (b), (c), (d) is correct.
Practice for these exams
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UGC NET HRM / Labour Welfare and Industrial Relations