Ch 2 _Econ_F10_posted

Ch 2 _Econ_F10_posted - Chapter 2 The Economics of Human...

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Chapter 2 The Economics of Human Capital
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Describe the concept of “derived demand” as it applies to labor. A derived demand is demand for an input derived from consumers’ demand for the good or service produced with that input In other words, consumers do not demand labor to make goods and services, but rather they demand the goods and services created by that labor
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Demonstrate basic knowledge of the workings of a labor market by: A. Graphing supply and demand B. Identifying and interpreting the meaning of equilibrium C. Identifying the difference between a shift in the curve and a movement along the curve as well as what factors cause a shift. Generate a graph of labor demand using several wage/ quantity combinations.
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Numbers of Workers Demand Supply Wage W1 W2 W3
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labor demand curve to shift and how those factors affect equilibrium wages. 1. Price of substitutes (labor abroad or substitute labor) 2. Output price of the product being produced. 3. Productivity of labor. 4. Expectations about the
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Ch 2 _Econ_F10_posted - Chapter 2 The Economics of Human...

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