3.5.1

Question 1

How is the supply of labour determined

Answer 1

The supply of labour is determined by those who want to be employed

Question 2

How is the demand of labour determined

Answer 2

The demand of labour is determined by the employers

Question 3

Derived demand

Answer 3

Labour is derived demand
This means that the demand for labour comes from the demand for what it produces

Question 4

What is the demand for labour affected by

Answer 4

The wage rate
Demand for products
Productivity of labour
Substitutes for labour
How profitable the firm is
The number of firms in the market