Principles of Macroeconomics / Unit 2 MAC 0131 short lesson, about 20 seconds
The Labor Market
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The idea
In the labor market households supply and employers demand, and the wage is the price.
In practice
Above the equilibrium wage there is a surplus of labor; below it, a shortage.
Where people slip
Labor demand is derived demand: it depends on demand for what the labor produces, so cooks are hired because meals are bought.
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