labour economics
Published on Nov 26, 2015
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MORE DECKS TO EXPLORE
PRESENTATION OUTLINE
100 voices... please?
a reasonable transaction perhaps?
series of important decisions ahead of you
in the next 2-4 years you will likely decide how the rest of your life goes
i want to be a doctor
there's always going to be sick people... thus always a demand for doctors
demand for labour similar to demand for goods
both relate to quantity that is demanded at a given price
Photo by Anirudh Koul
Consumers determine direct demand because they use their dollars to indicate the value of utility that they receive from a good at various price levels.
Derived demand is dependent on consumer demand for the good or services being produced. The greater the quantity demanded of a particular good or service, the greater the quantity of labour demanded to produce it.
marginal revenue product of labour (MRPL)
how demand labour is derived
Photo by Kheel Center, Cornell University
As an additional unit of labour is added to a firm's productive process, the additional output that is created is known as the marginal product. Marginal revenue product of revenue is the amount of additional revenue that is generated from this marginal product.
i hire someone
they do some work - the revenue they generate from their work is MRPL
Photo by Alan Light
In perfect competition MRPL is the price of good multiplied by the marginal product since each unit produced is sold at market price.
Photo by Claudio.Ar
law of diminishing marginal returns
back again! let's say i pay employees $80/shift
when deciding how many people to hire
firms consider wage rate
Photo by Kheel Center, Cornell University
what would happen if wages were to increase?
market labour demand curve
as price of labour increases quantity demanded decreases
Photo by theglobalpanorama
market labour demand curve
visual representation of how many people you can hire
change in the demand for product of labour
increase in demand for cars - same for employees. opposite applies too
Photo by Benoit cars
change in the price of productive resources
mainly capital- if price of capital goods increases relative to labour....
Photo by silkegb
change in worker productivity
if each worker is producing lots of stuff - demand increases
Photo by kylebaker
how productivity increases
- New capital equipment
- Better employee training
- Improved management
market labour supply curve
number of people willing to offer their services at each possible wage
Photo by Stuck in Customs
as wage rate increases and becomes greater than opportunity cost
more people are willing to offer their services in labour market
Photo by anieto2k
at higher wage rates
quantity of labour supplied is greater - market supply curve upward slope
Photo by Generation X-Ray
Other factors influencing labour supply curve
- specific skills needed for certain jobs
- geographic location of a market
change in size/composition of population
more or less people, age, demographics
Photo by dualdflipflop
changes in home technology
people can do stuff more efficiently so labour supply increases
Photo by David Locke
changes in attitudes about work
people want to work, women are in workforce - increase labour supply
Photo by JD Hancock
