The Labor Market
Most firms require labor to produce output. The number of workers to hire is often an important decision of the firm because it affects the costs and profits of the firm. Write a 2-3 page paper on the following issues:
1. In the context of your firm, discuss two factors that would increase your demand for labor. (Be sure to review Chapter 12 from the background section)
2. Is labor an fixed or variable cost in the short run? What are the fixed costs of your firm?
3. Explain the law of diminishing returns in your own words. This idea can be applied to other concepts in economics. Think about your own utility from consumption. Give a personal example of diminishing utility.
4. How is wage determined in any market? You can read the marginal productivitypresentation on this topic prepared by the instructor to help you with your answer.
SLP Assignment Expectations:
Use concepts from the modular background readings as well as any good quality resources you can find from the cyberlibrary or other internet search engines. Please be sure to cite all sources within the text and a reference list at the end of the paper.
Length: 2-3 pages double spaced and typed
The following items will be assessed in particular:
Your ability to examine the labor market in a particular firm.
Some in-text references to the modular background readings (APA formatting not required).
The essay should address each element of the assignment. Remember to support your answers with solid references.
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