Slides in this set
Marginal cost of labour
· The addition to a firm's total cost of production
resulting from employing one more worker
Average cost of labour
· The total wage costs divided by the number of
Market supply of labour
· Planned supply of labour by all the workers in a
labour market…read more
Individual worker's supply curve of labour
· Planned supply of labour by one worker
Marginal revenue product
· The monetary value of the addition to a firm's
total output brought about by employing one
Marginal physical product
· The addition to a firm's total output brought
about by employing one more worker…read more
A labour market is an example of a factor market.
This is a market in which the services of a factor of
production are bought and sold
Other factor markets include:
· Entrepreneurial skill
These are essentially the other factors of
The factor market
The roles of households and firms in factor
markets are the reverse of a goods market.
In the goods market, the firm is supply (the
product). This is demanded by the household.
In the factor market, the firm is demanding
labour. This is supplied by households.
This reflects part of the circular flow of income.…read more