Labour demand

Question 1

What is a labour market?

Answer 1

where firms and workers interact. firms demand and workers supply

Question 2

Is labour a derived demand?

Answer 2

Yes

Question 3

What is labour demand?

Answer 3

shows how many workers will be hired at a given wage rate

Question 4

why does the labour demand curve slope downwards?

Answer 4

sr: diminishing marginal productivity - if capital is fixed, each extra worker will produce less output, and will receive lower wages
lr: substitute effect - if wages are too high, firms will substitute labour for capital

Question 5

What are the factors affecting labour demand?

Answer 5

• derived demand
• productivity of workforce
• capital substitutes
• number of firms

Question 6

how does derived demand affect labour?

Answer 6

if demand for a good is high, firms will demand more labour

Question 7

how does productivity of workforce affect labour?

Answer 7

if workers are more productive, firms will demand more labour

Question 8

how does capital substitutes affect labour?

Answer 8

is capital is cheap, firms will sub in labour for it, reducing demand

Question 9

how does no. of firms affect labour demand?

Answer 9

if the no. of firms are high, labour demand will increase