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Labour Economics

Labour Economics encompasses the relationship between workers (the supply of labour) and the employers (the demand of labour). The relationship between these control the wage, employment levels, and the structure of the marekt. The government is also an important agent in the market. To determine employment and wage, which is quantity and price, we use the neoclassical supply and demand model.

Although labour economics shares many similarities with other types of markets and areas of economics, labour economics is unique in four main ways. First, is the diversity of its agents, as different groups within a population have different goals. Second, is the sociological component, demonstrated by institutional and legislative complications, such as labour laws implemented by the government. The third difference of labour economics is that it has to use finite information, as worker productivity is difficult to accurately measure. The last difference of labour economics is that price has multiple functions since wage serves different purposes, such as motivation for work effort and risk and a return for education.

The study of labour economics entails the study of the supply curve (S), which reveals the behaviour of the workers; the demand curve (D), which shows the behaviour of firms; and the equilibrium, which is when the quantity of labour demanded by the firms is equal to the quantity of labour that is supplied by the workers. The behaviours of each are often not straight forward. For example, from a microeconomic perspective, workers' behvariours may not necessarily act aggregately as an upward sloping supply curve. Though this is often assumed, it is contingent on a dominant substitution effect (over the income effect). 

Labour Economics is interested in the effect that policy issues, such as welfare, worker compensation, etc., have on the labour market. Furthermore, it is also concerned with unemployment, participation rates, and underemployment. To study how policy issues are implemented by the government to control the labour market, regression analysis is used to determine how these changes impact individual outcomes, such as a firm’s individual outcome.

Firm Selling Products in Highly Competitive Market

Q1A firm's product sells for $3 per unit in a highly competitive market. The firm produces output using capital (which it rents at $80 per hour) and labor (which is paid a wage of $20 per hour under a contract for 20 hours of labor services). Complete the following table and use that information to answer the questions that fol

Supply and Demand, and Labor

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4 Questions on Labour in Economics

1. You are the purchasing manager of a company and are responsible for ensuring that necessary inputs are available to keep your factory operating. For each of the three types of purchases identified below, recommend whether your company should use spot purchases, contract purchase, or internal production. Support your answer u

Monopolistic Competition and Differentiating Products and Services

Explore how firms in monopolistic competition differentiate their products or services to generate a market niche and gain more control over their pricing. To what extent can product differentiation create barriers to entry? How can product differentiation help firms to increase their short-run profits? Give an example of a firm

GDP and NDP

The table below sets out some data for Country X in 2007. Item Amount (in billions of dollars) Consumption expenditure 289 Government expenditure 99 Interest and

First Year Accounting vs. First Year Economic Costs

Suppose you work at Jiffy Lube, where you earn $15,000 per year. Your rich Uncle Walter recently died and left you an inheritance, so you are thinking of starting your own business. The business you wish to pursue will convert existing hybrid Toyota Prius automobiles to plug-in hybrid vehicles. You predict that you can retrofit

Calculate the various productivity measures.

Alyssa's Custom Cakes currently sells 5 birthday, 2 wedding and 3 specialty cakes each month for $50, $150 and $100 each respectively. The cost of labor is $50 per hour including benefits. It takes 90 minutes to produce a birthday cake, 240 minutes to produce a wedding cake and 60 minutes to produce a specialty cake. Alyssa's cu

Pricing Menu Items

Assume that you have a menu item that costs $3.43 in food cost and 18 minutes of direct labor to create. Price the menu item using at least two of the methods identified in the text. Include your math in a clear format so that others can see how you obtained that price. Explain how the two pricing methods you used differ. Then,

Marginal product of labor

At present Able Corporation has (in relative terms): Marginal Product of Labor = 30 Total Cost of Labor = 15 Marginal Product of Capital = 60 Total Cost of Capital = 20. 1. Is Able Corporation currently operating at its lowest possible cost? _____________ 2. Why, or why not? ______________________________________

Marginal Product of Labor

Emily draws cartoons that she sells to her classmates. Her average product of labor is five cartoons per hour if she works for one hour, four per hour, if she works for two hours, three per hour if she works for 3 hours, and two and a half per hour if she works for four hours. What is her marginal product of labor at one, two,

Enter and Exit of Firms

Please help with the following problem. ENTRY AND EXIT OF FIRMS: WHERE HAVE THEY OCCURRED? Go to the Census Bureau Web site at www.census.gov and select Economic Census, then Comparative Statistics, and then Manufacturing (More data). Identify three manufacturing industries that experienced large percentage increases in t

This solution debates to sell or process further decisions.

13-31 Scottie Sweater Company The Scottie Sweater Company produces sweaters under the â??Scottieâ? label. The company buys raw wool and processes it into wool yarn from which the sweaters are woven. One spindle of wool yarn is required to produce once sweater. The costs and revenues associated with the sweaters are given

Law of diminishing marginal product

You are the production manager at a steel plant, where all of the capital investment has been made for the next year. The only input you control is the amount of labor, which is priced at $15 per unit. Fill in the blanks in the following table and answer the question below. Labor Total Marginal Average

Incremental Cost

Incremental Costs. Fluff Rite, Inc., manufactures stove top popcorn poppers that it sells to distributors, who then customize and distribute the products to retailers as house-brand poppers. The yearly volume of output is 100,000 units. The selling price and cost per unit are shown below: Selling price $20 Costs: Direc

Table help

1. Complete the following table, where L is units of labor. Q is units of output, and MP is the marginal product of labor. L Q MP VC TC MC ATC 0 0 ____ $ 0 $12 ____

Managerial Economics: Completing a Cost Analysis

The MorTex Company assembles garments entirely by hand even though a textile machine exists that can assemble garments faster than a human can. Workers cost $50 per day, and each additional laborer can produce 200 more units per day ( i.e., marginal product is constant and equal to 200). Installation of the first textile machine

I need some help understanding this

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A large rear dump truck

A large rear dump truck working in a coal mining operation under good conditions has a current purchase price of $ 2,000,000, including $ 200,000 for the initial cost of six tyres. What is the net capital cost? If the repair factor is 0.25 x 10-4 and for good conditions the job factor is 0.8, determine the estimated repair c

Accounting.

1.-Job order costing, cost drive rates. The Brinker company uses a job order costing system at its local plant. The plant has a machining department and a finishing department. The company uses machine hours to allocate machining department support cost to jobs and uses direct labor cost to allocate finishing department supp

A system of mining requires 3 operators

A system of mining requires 3 operators at any one time . The mine operates on a three shift basis per day , 6 days a week . Allowing for availability the mining system operates 5,000 hours per year. Each worker costs $55,000 per year. Assuming all personnel are required on service shifts , an absenteeism rate of 5%, determine t

Mathematical Constraint Functions

Problem 3: Linear Programming I have a six acre farm that I can use for the productionof rice (X1) or corn (X2). I have also 27 days of labor and 32 tons of fertilizer. One acre of rice requires three days of labor and eight tons of fertilizer, while one acre of corn requires ni

Unit 2 - Racial Issues & Discrimination

Assignment Type: Deliverable Length: 500-750 words Diversity Training As the new manager of human resources (HR), you are now targeted at making your workforce more aware of current racial diversity issues (e.g., the dramatic increase in the Hispanic percentage of the workforce and how to reduce the potential tensio

Units of labor/ diminishing returns /average product of labor

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