Explain what is meant when it is said that the demand for labor is a derived demand
The demand for labor is derived from the demand for the good or service that labor produces. The demand curve for labor is the downward-sloping portion of the marginal revenue product curve of labor, which is the product of marginal physical product of labor and the price of the output. If the price of the output increases, the demand curve for labor in turn will shift outward.
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Consider a downward-sloping demand curve. When the price of an inferior good increases, the income and substitution effects
A) work in the same direction to increase quantity demanded. B) work in the same direction to decrease quantity demanded. C) work in opposite directions and quantity demanded increases. D) work in opposite directions and quantity demanded decreases.
Balance of payments deficits arise whenever the exchange rate is set at an artificially high level
a. True b. False Indicate whether the statement is true or false