Asked by Allan Gazcon on Jun 24, 2024
Verified
The demand for labor is
A) determined by the wage rate.
B) determined by the supply of labor.
C) its marginal revenue product schedule.
D) higher at lower wage rates.
Demand for Labor
The total amount of labor that employers are willing and able to hire at a given wage rate in a certain period.
Marginal Revenue Product
The additional revenue generated from employing one more unit of a resource or factor of production.
Wage Rate
The amount of compensation workers receive in exchange for their labor, typically expressed per hour, day, or piece rate.
- Acknowledge the variables affecting the demand for labor and grasp the idea of marginal revenue product.
Verified Answer
DM
Despina MarinaJun 27, 2024
Final Answer :
C
Explanation :
The demand for labor is determined by its marginal revenue product schedule, which represents the additional revenue generated by hiring an additional unit of labor. This schedule takes into account the productivity of the labor and the price of the output produced. The demand for labor is not directly determined by the wage rate or the supply of labor, though these factors can influence it. Additionally, the statement "higher at lower wage rates" is inaccurate and misleading, as it suggests an inverse relationship between demand for labor and wage rate, which is not always the case.
Learning Objectives
- Acknowledge the variables affecting the demand for labor and grasp the idea of marginal revenue product.