demand for laboour 3.5.1

Question 1

define demand for labour?

Answer 1

the demand curve for labour shows how many workers will be hired at any given wage rate over a period of time

Question 2

is demand for labour derived demand?

Answer 2

this is derived demand where firms only employ workers when there is high demand for goods and services

Question 3

what does MRP state?

Answer 3

the extra revenue generated when a additional worker is employed

Question 4

how do you calculate MRP?

Answer 4

MPPXMR

Question 5

draw the curve for demand for labour?

Answer 5

• draw the x-axis as quantity of workers
• draw the y-axis as wage
• then draw a curve representing mrp which demand for labour
• draw a horizontal curve as mc

Question 6

why is the curve downwards?

Answer 6

law of diminishing returns

Question 7

describe what happens during the curve?

Answer 7

usually, as more workers are employed they are bringing more revenue, then the law of diminishing returns happens where employing more workers means less revenue and more costly
-so essentially what the curve is saying is where MRP=W then employing workers after that point will bring no profit.

Question 8

define demand for product? impact for demand for labour

Answer 8

if there is no demand for the product- then there will be no demand for work which means the demand for labor will go down, vice-versa

Question 9

define prices of cell? impact for demand for labour

Answer 9

when machinery and equipment is cheap-then firms will switch to machinery for labour this means that demand for labour will go down, vice-versa

Question 10

define wages in other countries-impact for demand for labour?

Answer 10

when wages are lower in other countries-people will be employed in those countries since it’s lower costs for firms-demand for UK low

Question 11

define tech impact for demand for labour?

Answer 11

if there is an improvement in tech then jobs will be lost-so less demand for labour
eval-demand for labour in technological based industries is increasing

Question 12

define regulation for impact for demand for labour?

Answer 12

regulation- high regulation can discourage firms from creating because hiring can be time-consuming and costly that will reduce demand for labour.

Question 13

define PED of labour?

Answer 13

this is the responsiveness of QD of labour to the wage rate

Question 14

how is demand for labour related to price elasticity of demand?

Answer 14

when good is price-elastic-there will be a rise in wages-so large impact on quantity-business will reduce the number of employed-to make a larger profit

Question 15

define the proportion of wages?

Answer 15

-when wages are a huge proportion of costs-there will be an increase in wages which will increase costs-this will lead to a fall in demand for labour

Question 16

define time?

Answer 16

in the long-run it will be more elastic since machinery can be developed and jobs will be moved whilst in the short run firms have to employ workers and rebundancy payments will be expensive