3.5.1 Demand For Labour

Question 1

What is demand for labour?

Answer 1

Shows how many workers an employer is willing and able to hire at any given time period

Question 2

What is the marginal revenue product of labour ( MRPL ) ?

Answer 2

An extra revenue generated when an additional worker is employed

Question 3

What shifts the labour demand curve?

Answer 3

• rise in that consumer demand
• change in the market price of output
• increase in he productivity of labour = making labour more cost effective
• employment subsidy
• change in the cost of capital equipment

Question 4

Problems with estimating the MRPL for workers

Answer 4

• assumes they maximise efficiency
• hard to quantify output
• collaborative work makes it more difficult to establish the productivity
• many people have the ability to set their own pay

Question 5

What is derived demand?

Answer 5

Demand for the factor of production used to produce another good/service