Labor Flashcards
Factors of production
labor
land
capital
entrepenuership
A firms demand for factors of production is derived from:
demand for the product the factor of production produces
Marginal Product
Change in output arising from a change in input
Marginal factor cost
change in total cost resulting from a change in input
if MRP> w,
hire more labor
if MRP<w
hire less labor(fire mfs)
Firm is the _________ in the labor market
price taker
MFC=W
hiring rule: A firm should choose quantity of labor where
MRP=MFC=W
What shifts labor curve
Price of output, characteristics of its market
technological characteristics
price of capital
income effect and substitute effect
substitute effect
higher wages encourage workers to increase number of hours worked. oportunity cost of leisure increases
income effect
higher wages engourage workers to decrease hours worked because leisure is a normal good
participation rate=
labor force / working age population
A persons’s MRP represents their
contribution to a firm
Women wage gap
occupational discrimination, differences in experience, gender discrimination
