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- Economics Terms A-Z
- Posted 1 year ago
Labour Market
In a labour market, employees sell their labour (the item in the market) to employers for a wage (the price at which labour is exchanged in the market). Insofar as labour is a factor of production, a labour market is classified as a factor market. As with the market for any normal good or service, demand for labour tends to increase as the wage (price of labour) falls, while the supply of labour tends to increase as the wage rises and it becomes more attractive for people to work.
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- Economics Terms A-Z
- Posted 1 year ago
Law of Diminishing Marginal Returns
The law of diminishing marginal returns states that as the input of a factor of production increases ceteris paribus, the additional output from the last unit of input decreases.
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