3.5 - Demand for Labour

Question 1

What is the demand for labour?

Answer 1

Quantity of workers an employer/business is willing and able to hire at a given wage rate within a given time period

Question 2

What type of demand is the demand for labour?

Answer 2

Derived
Not wanted for its own sake, but for what can be produced by it

Question 3

When will demand for labour typically rise?

Answer 3

Demand rises
Product price rises

Question 4

What is labour demand graphed according to?

Answer 4

Wage Rate
Employment

Question 5

What does labour demand generally have an inverse relationship with?

Answer 5

Wage Rate

Question 6

What will a fall in the wage rate create?

Answer 6

Substitution effect
Labour relatively cheaper than capital
Expansion in labour demand + force

Question 7

What affects the aggregate demand for labour?

Answer 7

Economic strength/activity
Strong => Demand + Employment

Question 8

Why may fewer workers be needed to satisfy future levels of aggregate labour demand?

Answer 8

Automation
Improved education
Improved training programmes