Labour Markets
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5 Terms
Marginal Revenue Product
The extra revenue gained from hiring an extra worker, usually the wage rate
Demand = ?
MRP
AI in the labour market
Demand shifts left for low wage work
Demand shifts right for high qualified work like AI specialists
Lots of skills needed
Inelastic supply as supply is unresponsive given a chance in wages as it takes longer to train as an AI specialist
Marginal Productivity Theory
Linked to wage as the profit a worker produces is linked to the amount they get paid, the marginal revenue product. With the Marginal Physical Product being the extra output gained by employment an extra worker whilst the MRP is the extra output gained by employing an extra worker and the revenue gained from that decision.
Note 
Flashcards (40)