Many factors determine the supply and demand for labour. Identify and explain two factors that would increase or decrease the demand for labour. Identify and explain two factors that would increase or decrease the supply of labour. Your answer should include a discussion on marginal revenue product. I believe it would be difficult to answer this question correctly without referring to that topic. One way to approach this question would be:
1. Define marginal revenue product, and then discuss how this can change. Then relate this to the change in demand for labour.
2. Explain the determinant of labour supply. Explain what might change one of these determinants.
When answering this question would be a good time to review the difference between a change in quantity demanded and a change in demand and the difference between a change in quantity supplied and a change in supply. Remember, wage rates[theprice to rent labour] will not affect either the supply or the demand for labour!
Many factors determine the supply and demand for labour. Identify and explain two factors that would increase or decrease the demand for labour. Identify and explain two factors that would increase or decrease the supply of labour. Your answer should include a discussion on marginal revenue product. I believe it would be difficult to answer this question correctly without referring to that topic. One way to approach this question would be:
1. Define marginal revenue product, and then discuss how this can change. Then relate this to the change in demand for labour.
2. Explain the determinant of labour supply. Explain what might change one of these determinants.
When answering this question would be a good time to review the difference between a change in quantity demanded and a change in demand and the difference between a change in quantity supplied and a change in supply. Remember, wage rates[theprice to rent labour] will not affect either the supply or the demand for labour!
