Demand For Labour

Question 1

The demand for labour is a deprived demand

Answer 1

Employers do not pay someone to work because they gain utility from their workings, they do so in order that they might produce something from which they gain utility

Question 2

At a given wage rate

Answer 2

The demand for labour will depend on the productivity of the labour

Question 3

Marginal physical product

Answer 3

The additional worker will increase the amount of output produced. Thus increase is MPP

Question 4

Marginal revenue product

Answer 4

This increase in output ceteris paribus lead to an increase in revenue

Question 5

As long as there are postive marginal returns

Answer 5

The firm will increase both output and revenue by adding more workers

Question 6

MRP curve downward slope

Answer 6

Is due to diminishing marginal if other factors of production remain fixed.

Question 7

Each subsequent worker adds less

Answer 7

To the total physical product and therefore has a lower marginal revenue product

Question 8

PED availability of subsitutes

Answer 8

If labour is employed in an industry where capital is readily available. Demand will more price elastic
If capital cannot be used demand for labour is more price inelastic