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Chapter 4: Q.13 (page 104)

What is the “price” commonly called in the labor market?

Short Answer

Expert verified

Wages are the term for the "price" in the labor market.

Step by step solution

01

Definition

Labor market refers to the marketplace where labor services are exchnaged between households and businesses. Households supply labor in the market which is used by businesses for production of goods and services.

02

Explanation

Wage or pay is another term for the price paid in the labor market. Some distinctions between the labor market and other goods markets that we or you may have heard of before include the fact that in a regular goods market, the household is usually the demand. Debt owed to pepper. Consumers who demanded infirm things were frequently the ones who supplied them. It's the other way around in the labor market.

03

Conclusion

Therefore, the households that give labor to firms in firms are the ones that have demand labor.

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Most popular questions from this chapter

Table 4.6 shows the amount of savings and

borrowing in a market for loans to purchase homes, measured in millions of dollars, at various interest rates. What is the equilibrium interest rate and quantity in the capital financial market? How can you tell? Now, imagine that because of a shift in the perceptions of foreign investors, the supply curve shifts so that there will be $10 million less supplied at every interest rate. Calculate the new equilibrium interest rate and quantity, and explain why the direction of the interest rate shift makes intuitive sense.

Interest Rate
Qs
Qd
5%
130170
6%135150
7%140140
8%145135
9%
150125
10%155110

In the labor market, what causes a movement along the demand curve? What causes a shift in the demand curve?

Under what circumstances would a minimum wage be a nonbinding price floor? Under what circumstances would a living wage be a binding price floor?

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

a. a rise in demand

b. a fall in demand

c. a rise in supply

d. a fall in supply

Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Sketch a demand and supply diagram to support your answers.

a. The number of people at the most common ages for home-buying increases.

b. People gain confidence that the economy is growing and that their jobs are secure.

c. Banks that have made home loans find that a larger number of people than they expected are not repaying those loans.

d. Because of a threat of a war, people become uncertain about their economic future.

e. The overall level of saving in the economy diminishes.

f. The federal government changes its bank regulations in a way that makes it cheaper and

easier for banks to make home loans.
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