CHAPTER 57 DEMAND FOR LABOUR Flashcards
Elasticity of demand for labour
The responsiveness of the quantity demanded of labour to changes in the price of labour, the wage rate. It is measured by the formula
% change in quantity demanded for labour
% change in the wage rate
Marginal physical product
The physical addition to output of an extra unit of a variable factor of production.
Marginal revenue product
The value of the physical addition to output of an extra unit of a variable factor of production. In a perfectly competitive product market, where marginal revenue equals price, it is equal to marginal physical product times the price of the good produced.
Total physical product
The total output of a given quantity of factors of production.
Unit labour cost
Cost of employing labour per unit of output or production.