Labour Demand, Supply & Equilibrium - Introduction
Labour forms a key aspect of economic study, not least because it is one of the most direct and impactful economic outcomes. 'Labour' is a representation of the roles undertaken by people within an economic system, how much they produce, and how they are compensated. Labour is a very important issue - unemployment or low wages pose a great threat to citizens and are always high on government and central bank agendas.
This chapter will explain how the labour markets function in the economy, explaining supply and demand, the determination of wages and the different types of unemployment. This will give a good overall view of the economics of labour and an understanding of how labour activity in the economy is determined.
This subject forms one of the key parts of macroeconomics and is vital to understand the practical and human impacts of wider economic policy and determinants.
Goals and objectives for this section
- To understand how labour fits within other economic theory.
- To be able to explain the way that supply and demand of labour interact, and how this determines wages.
- To understand the role of productivity and productive frontiers
- To appreciate the different types of unemployment