Micro A2 - Demand For Labour Flashcards
1
Q
Factors that influence the demand for labour
A
Profitability of firms to expand.
Barriers to entry
Minimum Wage
Substitutes
2
Q
The demand for labour as a derived demand
A
demand that comes from the demand for something else
3
Q
Marginal revenue product of labour
A
- how many workers a business will employ at a given wage rate
- MRPL is the extra revenue that is generated when a additional worker is employed
- MRPL = marginal (additional) product of labour x Marginal (additional) revenue
4
Q
Marginal revenue product curve
A
5
Q
Demand curve for labour
A
6
Q
factors affecting the demand for labour
A
- Wage rate
- the demand for products
- productivity of labour
- profitability of firms
- substitutes
- number of buyers
- supply of labour
7
Q
The supply of labour curve
A
8
Q
Factors affecting the supply of labour
A
- Wage rate
- Working population size
- Migration
- People’s preferences for work
- Net advantages of work
- Substitution affect
- individual labour supply
- trade union
- subsidies
- tax benefits
9
Q
Backwards bending supply curv
A
After a certain point, higher wages can lead to a decline in labour supply
