ECONOMICS

CHp 19
Types of trade union
● Craft union
● General union
● Industrial union
● White collar union
Duty of trade union is to protect the rights of the members in it
Collective bargaining
Wage claims
● More productivity so more pay
● Industry profit have risen so more pay
● Comparability argument so more pay
● Cost of living increase so more pay
Factors affecting strength of trade union
● High level of economic activity
● A lot of member
● Highly skilled
● Work has demand for the product
● Favourable government legislation
Industrial action
● overtime ban
● Work to rule(contract)
● Strike
Effects on firm of trade unions(good and bad)
● Firm output harmed
● Firm reputation harmed
● Firm cost and flexibility harmed(no overtime)
&bsnp
● Bargaining is less time consuming
● Cheaper and easier
● Trade unions encourage education and training
● Channel of communication
ECONOMICS

CHp 20
SIZE of FIRM
Main measures:
Output
Number of workers
Value of finance capital it has
● Availability of finance
● Age of the firm
● Type of business org
● Internal economies of scale and diseconomies
● Size of the market
SMALL FIRM:
● Small size of industry
● Preference of consumers
● Owners preference
● Flexibility
● Technical factors
● Lack of finance
● Location
● Cooperation between firms
● Specialisation
● Government support
TYPES OF INTERNAL ECONOMIES OF SCALE:
● Buying economies(low average cost,better treatment)
● Selling economies of scale
● Managerial economies of scale
● Financial economies of scale
● Technical economies of scale
ECONOMICS

● Research and development economies of scale

● Risk bearing economies
INTERNAL DISECONOMIES OF SCALE:
● Difficulties controlling the firm
● Communication problems

EXTERNAL ECONOMIES OF SCALE:

● Skilled labour force
● A good reputation
● Specialist suppliers of raw materials and capital goods(ancillary)
● Specialist services
● Improved infrastructure
EXTERNAL DISECONOMIES OF SCALE:
● More workers congestion
● Too Much competition price go up of resources
CHp 21
FIRMS & PRODUCTION
When factors of production are substitutes
● Productivity
● price
Determine which one is to be produced

Quantity of labour can increase if overtime is given

Factors affecting demand for capital

goods
● Price
● Profit levels
● Corporation tax
● Income
● Interest rates
ECONOMICS

● Confidence levels
● Advances in technology
Advantages of labour production:
● Substitute to capital
● Cant make full use of capital
● Personalized
● Flexible
● feedback