CHAPTER 57 DEMAND FOR LABOUR Flashcards

1
Q

Elasticity of demand for labour

A

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

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2
Q

Marginal physical product

A

The physical addition to output of an extra unit of a variable factor of production.

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3
Q

Marginal revenue product

A

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.

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4
Q

Total physical product

A

The total output of a given quantity of factors of production.

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5
Q

Unit labour cost

A

Cost of employing labour per unit of output or production.

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