Microeconomics 5.1-5.3 Labour Market Flashcards
The Labour Market
1
Q
Labour
A
A factor of production which uses human capital
2
Q
Derived demand
A
Where the demand for a factor of production is based upon the demand for what it produces.
3
Q
Demand for labour
A
Willingness and ability of a firm to hire labour at differnet wage rates.
4
Q
Wage
A
The cost of a unit of labour (the marginal cost)
5
Q
Marginal revenue product of labour
A
the additional revenue received by a firm as it increases output by using an additional unit of labour input
6
Q
MPPxP=
A
Marginal revenue product of labour (MRPL)
7
Q
MRPL
A
Marginal revenue product of labour
8
Q
Marginal physical product
A
Amount of additional output produced if the firm increases its labour input by 1 unit (i.e. adding one more person-hour)
9
Q
A
