Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
Economics
The labor market determines the price of labor (wages) at an equilibrium level. The number of workers in the market will be determined in part by the opportunity cost of not working. Thus, lower wages will mean that more workers will be voluntarily unemployed. As the supply of workers falls, it becomes lower than demand. Thus, firms will increase the wages in order to bring more workers back into the workforce. The point of natural unemployment, where no workers are voluntarily unemployed, is the long-run equilibrium point.
Prices are related to the equilibrium point because the cost of workers will be factored into the price of goods. In addition, the price of goods will impact the opportunity cost of being unemployed. Short-run equilibrium is achieved at any point where the price of goods is sufficiently high as to lower the opportunity cost of being unemployed that, in combination...
At such a point, however, wages are likely to increase as the result of inflationary pressures. Workers will demand to be paid more in order to cover the higher cost of purchasing goods.
To achieve long-run equilibrium, wages and prices must be adjusted to a point where there is a sufficient enough gap created between the working wage relative to the price of goods and the payment one receives while not working (the opportunity cost of not working). This adjustment should be upward, primarily because there is a wage floor in the form of minimum wage. Lowered wages and prices will diminish the opportunity cost of not working, so in order to achieve long-run equilibrium, a movement to increase wages will occur, and this in turn will increase prices. If wages and prices are too high, the economy may operate at full employment, but…
Works Cited:
No author. (2011). Labor markets and unemployment. University of Colorado. Retrieved February 1, 2011 from http://www.colorado.edu/Economics/courses/econ2020/section5/section5.html
("2004 Yearbook of Immigration Statistics," 2010) However, when you compare the unskilled immigrant with the skilled immigrants, it is clear that you are seeing a similar kind of scenario occurring. Where, they have lower costs of labor in comparison to those educated native workers. In those situations where the immigrants are unskilled, means that many state and local governments will face increased growth in the population. (Car, 2001) Yet,
Labor Market, Unemployment Defining and classifying Unemployment There is a level of unemployment in any economy, which is not automatically a bad thing, as most people would think. The presence of a level of unemployment, which usually is presented as a percentage, indicates that at any one given point in that economy, there are people looking for work and managers looking for better employees. In economics, the only important factor to look
Unemployment in the Labour Market Is Primarily Voluntary talk about Keynesian theory, classical theory, new classical theory, new Keynesian theory, neo-classical theory also mention the game theory, Marxian theory, natural rate of unemployment, and the rational expectations role. Please use graphs as well to explain Unemployment is a particularly high topic in the news at the moment with the recession seemingly refusing to come to a stop and the number of people losing
Subway: The Labor Market Demand for labor The most obvious source of an increase of a demand for labor by an organization is an increase in the demand for the product or service provided by the firm. In the case of Subway, the organization provides both a product (food) and service (food preparation). When demand for sandwiches increases, the need for more workers to take orders, make sandwiches, clean the premises and
Foreign Market Determine which institutional and risk factors must be considered and whether they support entry or not. The company needs to evaluate critically the risks and institutional factors before deciding on entering the foreign market. The institutional and risk factors must be relevant to the ambitions and expectations of the company. Institutional factors constitute three principal aspects. The first aspect of institutional factors is the political institutions for instance the
Similar to product markets, labour markets tend to be characterised by imperfections. The imperfections stem from factors such as monopsony, trade unions, wage discrimination, labour immobility, government interventions, as well as incomplete information on the part of workers (Manning, 2010; Abbritti, Boitami and Damiani, 2012). Indeed, labour markets are persistently imperfectly competitive (Dwivedi, 2010). Imperfections in the labour market often play a significant role in generating unemployment (Baker et al.,