5.1 - demand for labour

Question 1

Factors affecting demand for labour

Answer 1

Elasticity / demand for a product
Price of product
Price of capital
Immigration
Productivity rate

Question 2

Factors affecting wage elasticity

Answer 2

Substitutability – can capital replace labour?
Elasticity of product – elastic product = elastic labour
Cost of labour
Time period

Question 3

MRP

Answer 3

Extra revenue gained by a firm from employing an extra worker

Question 4

What does high MRP lead to?

Answer 4

High employment
Higher wages

Question 5

MRP equation

Answer 5

MPP x price

Question 6

Marginal physical product

Answer 6

Extra output produced by a worker

Question 7

Productivity

Answer 7

Output per unit of input

Question 8

Productivity equation

Answer 8

Output / no. of hours

Question 9

Labour productivity

Answer 9

Output per worker

Question 10

Unit labour costs

Answer 10

Average cost of labour per unit of output produced

Question 11

ULC equation

Answer 11

Total labour cost /
Total level of output

Question 12

Derived demand

Answer 12

Labour is only demanded with an increase in G+S sold by a firm.