1.(revenue, cost) generated to the 2.(dividing, multiplying) the price 3.(increa
ID: 1122425 • Letter: 1
Question
1.(revenue, cost) generated to the
2.(dividing, multiplying) the price
3.(increases, decreases) as additional workers
4.(increases, decreases) as a additional workers
5.curve slopes (upward, downward).
6.(an increase, a decrease) in the number
7.(a decrease, an increase) in the price of the product
8.(a decrease, an increase) in the productivity
9.(an increase, a decrease) in the cost of workers’
10.(a decrease, an increase) in the price of labor
11.(an increase, a decrease) in he productivity of
12.(an increase, a decrease) in the number of
13.(rise, fall)
14.(a decrease, an increase) in the population of workers
15.(rightward, leftward) shift of the demand curve
16.(an increase, a decrease) in the equilibrium
17.(an increase, a decrease) in the equilibrium quantity
18.(leftward, rightward) shift of the supply curve
19.(a decrease, an increase) in the equilibrium wage
20.(a decrease, an increase) in the equilibrium quantity
KYOKO: Hi Jacques, I would like to ask you a few questions about the market for labor. How is the demand for labor derived from the demand for the product labor produces? JACQUES: The demand for labor is a "derived demand" because the demand for labor is derived from the demand for the product labor produces. For example, suppose the demand for automobiles increases. The equilibrium quantity of automobiles produced will increase. Therefore, the demand for auto workers will increase. It simply takes more workers to produce more automobiles. A decrease in the demand for automobiles will decrease the demand for auto workers. KYOKO: Thanks, Jake! Why is a firm's marginal revenue product of labor (MRP) curve its demand curve for labor? JACQUES: Let's see if I can help you find an answer to your own question. Let's begin with a review of what you know about marginal revenue product of labor (MRP.). What is the marginal revenue product of labor (MRP1)? How is it calculated? KYOKO: The marginal revenue product of abor MR . is the additional revenue generated to the firm from the employment of an additional unit of labor. M 1 is calculated by multiplying the price of the product produced by the marginal product of the additional worker MP, Because the marginal product of labor (MP, decreases as additional workers are employed, the MRP, decreases as additional workers are employed. Therefore, the MRP, curve slopes downward JACQUES: Can you tell me, Kyoko, what could cause an increase in the market demand for labor, which would shift the market demand for labor curve to the right?Explanation / Answer
Answer : The marginal revenue produced is (1) revenue generated to the firm from the employment of an additional labour.MRPLis calculated (2) multiplying the price of the product produced by the marginal product of additional worker because the marginal product MPL (3) decreases as additional workers employed, the MRPL (4) decreases as additional worker are employed. Therefore, MRPL curve slope(5) downard.
Because the market demand for labour is really the summation of all the individual firm demand for labour, can increase in the market demand for labour could be caused by(6)increase in the number of firms demanding labour.
(7) An increase in demand for labour could caused by increase in the price of the product produced.
(8) increased in the productivity of the workers.
(9)Another cause for increase in the market demand for labour be decreases in the cost of workers like health insurance.
(10) Finally, increase in the price of labour substitute like capital
(11) Decrease in the productivity of labour substitutes could also increase demand for labour.
(12) The supply curve of labour shift to the right, if there is increase in the number of workers willing to work at any wages
(13)If wages of other similar market decreases than the supply has been increased.
(14) Or If there is increase in the population of workers.
(15) An increase in demand is reflected graphically as a rightward shift of the demand curve
(16) This will causes increase in equiliburm wage rates.
(17) And increase in equiliburm quantity of workers employed in this labour market.
(18) An increase in supply reflected by graphically as rightward shift of the supply curve,
(19)This will cause a decrease in the wage rate
(20) Increases in the equiliburm quantity of workers employed in the labour market.
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