The labor market is an inversion of the goods and services market

The labor market is an inversion of the goods and services market

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The labor market is an inversion of the goods and services market: in the labor market,  individual buyers from the goods and services market become the suppliers of labor,  while the firms that sold goods in the goods and services market become the buyers.  Firms need workers to produce and sell goods, and so after they have decided how  many workers and how many hours of labor they want, they enter the labor market and  "buy" labor. Workers enter the labor market with an idea of how much they want to work  and how much they want to be paid, and they "supply" the labor. The combination of the  two, labor supply and labor demand, determines how the labor market behaves. Let's  take a look at labor supply.  Workers, when deciding whether or not they want to work, and how much they want to  work, are faced with a choice between two possibilities: leisure and consumption. 
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This note was uploaded on 12/13/2011 for the course ECO 1320 taught by Professor Staff during the Fall '11 term at Texas State.

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The labor market is an inversion of the goods and services market

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