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Chapter 4: Q13 (page 104)

What is the “price” commonly called in the labor

market?

Short Answer

Expert verified

Price in Labor Market is 'Wages or Salaries' paid by firms & received by workers.

Step by step solution

01

Labor Market - basic concept 

Labor is demanded by firms to produce goods & services, further sold for profit.

Labor is supplied by labourers workers, to earn return on their factor services provided

02

Labor Price Concept 

Price of labor is the factor payment paid by firms & factor income received by workers, ie wages and salaries.

Labor demand by firms is inversely related to its price paid ie wages, and labor supply is directly related to price received ie wages.

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Most popular questions from this chapter

Are households demanders or suppliers in the goods market? Are firms demanders or suppliers in the goods market? What about the labor market and the financial market?

Select the correct answer. A price ceiling will usually shift:

a. demand

b. supply

c. both

d. neither

Which of the following changes in the financial market will lead to an increase in the quantity of loans made and received:

a. rise in demand

b. a fall in demand

c. a rise in supply

d. a fall in supply

Why is a living wage considered a price floor? Does imposing a living wage have the same outcome as a minimum wage?

Identify each of the following as involving either demand or supply. Draw a circular flow diagram and label the flows A through F. (Some choices can be on both sides of the goods market.)

a. Households in the labor market

b. Firms in the goods market

c. Firms in the financial market

d. Households in the goods market

e. Firms in the labor market

f. Households in the financial market
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