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

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

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
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. 
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern