Labor Economics Notes

Labor Economics Notes - Labor Economics Chapter 1 Workers...

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Labor Economics Chapter 1 Workers are trying to find the best jobs. Workers are trying to sell their labor at the highest price. Firms are trying to make money. Firms are trying to buy labor at the lowest price. Three leading actors in the labor market o Workers o Firms o Government Labor Supply Curve (Worker)- upward sloping curve which shows that workers who want to maximize their well-being tend to supply more time and more effort and as a result, have a higher payoff. If the firm will pay more their will be more workers willing to supply their services. The higher the wage that is being offered, the larger the labor supplied. Labor Demand Curve (Firm)- labor demand is derived from the desires of consumers. Firms want to maximize profits so they hire and fire in order to fit consumer needs. Firms want to hire many workers when labor is cheap but refrain from hiring when labor is expensive. So the curve is downward sloping. Earnings are on the y axis, employment is on the x axis.
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This note was uploaded on 10/01/2008 for the course ECON 280 taught by Professor Kinlaw during the Spring '08 term at UNC.

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Labor Economics Notes - Labor Economics Chapter 1 Workers...

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