Demand for labour Flashcards
What is labour ?
A derived demand, the demand for labour comes from the demand for what it produces
What is demand related to ?
how productive labour is and how much is demanded
What are nominal wages ?
Monetary value of wages 10 pound • 10
What are real wages ?
Wages adjusted to inflation
What is the demand for labour affected by ?
Wage rate, Demand for product, Productivity of labour, Substitutes for labour,How profitable the firm is, Number of firms in market
What is unit labour cost ?
How much labour costs per unit of output
The more productive a country comes means …
The lower its unit labour costs are
What is an individuals labour supply affected by ?
Income and substitution effect
What is the substitution effect ?
When the wage rate passes a certain amount people substitute less hours for more leisure time
