Labour D&s

Question 1

Marginal revenue product

Answer 1

The change in a firms revenue resulting from employing one more worker

Question 2

Marginal product of labour

Answer 2

The change in output that results from employing one more worker

Question 3

Income effect

Answer 3

The effect on the supply of labour caused by the change in the ability to buy labour

Question 4

Substitution effect

Answer 4

The effect on the supply of labour caused by s change in the opportunity cost of leisure

Question 5

Flexible labour market

Answer 5

A labour market that adjusts quickly and smoothly to changes in the demand for and supply of labour

Question 6

Economic rent

Answer 6

A surplus paid to a factor of production above what is needed to keep it in its current occupation

Question 7

Transfer earnings

Answer 7

The amount a factor of production could earn in its best alternative occupation

Question 8

Derived demand

Answer 8

Demand for one item depending on the demand for another item