Labour supply Flashcards
1
Q
How do we calculate labour supply?
A
1) Find the FOCs (= 0)
2) Find the optimal ratio of the 2 goods (divide dU/dR (leisure) by dU/dC (consumption) to get MUr/MUc)
2
Q
MPL + formula?
A
Increase in Q that results from an extra single unit of labour, ceteris paribus
dQ/dL
3
Q
APL + formula?
A
Ratio of output to no. of labour units employed
q/L
4
Q
SRMC(q) fomrula?
A
w/MPL
