The demand for labor is said to be a “derived” demand. What is the meaning of a derived demand? How does this concept help to determine the demand for labor?

Questions:

  • The demand for labor is said to be a “derived” demand.  What is the meaning of a derived demand? How does this concept help to determine the demand for labor?
  • What are some of the factors that determine the supply of labor in a market? What significant factors have changed the supply of labor over the last twenty years?
  •  How does a firm determine its prices and the quantity of labor required in the resource market during a specific period?
  •  Why do income inequalities exist?  How are income inequalities measured? How have income inequalities changed from 1980 to the present?
  • What is the role of the government, in terms of dealing with the problem of income inequalities?  What are the arguments, for and against, government involvement in this area?
  • Why do nations trade?  What is meant by the concept of “Comparative Advantage”?  Could a nation be better off economically, if it practiced an isolation policy?
  • The United States has had a significant trade imbalance for several years.  What are the problems associated with having a negative trade balance?  What can be done to correct the imbalance?
  • How are exchange rates determined?  What is the significance of currency devaluations to the home country?  To other countries?