FORMATIVE:

NAME AND SURNAME:_______________________

LO: Explain the peculiarity of resource markets, particularly the labour market
INSTRUCTIONS Read the questions below answer all questions QUESTION 1 - Who is demanding LABOUR? FILL IN THE MISSING WORDS

GR:___________

Labour is demanded as a_________________ to help produce___________________. The demand for labour is therefore considered a_____________________ '. This means that the demand for labour is ___________ from the demand for the goods and services that the labour can____________. The amount that labour can produce is therefore a critical determinant of demand. POSSIBLE ANSWERS: Produce, derived demand, factor of production,goods and services , derived QUESTION 2: CONCEPTS Use your textbook or library to find out definitions for the following: Commodity Market

___________________________________________________________________________________________ __________________________________________________________________________________________.

Factor markets ___________________________________________________________________________________________ __________________________________________________________________________________________.

Marginal physical product

__________________________________________________________________________________

Marginal revenue product

___________________________________________________________________________________________ _______________________________________________________________________.

QUESTION 3: Use these definitions to fill in the table and answer the questions below:
Wage rate ( per day) Marginal Physical Product Price of Product () Marginal Revenue Product

No. of people

30

20

30

25

30

22

30

17

30

12

30

30

N.B. We are assuming perfectly competitive markets and all figures are daily ones. Use the table to plot the Marginal Revenue Product Curve. (You may want to put the figures into a spreadsheet package to do this or you can use the axes below).

1. How many people will the firm employ at a wage rate of 30 per day? _____________

2. If the wage rate was to rise to 60 per day, how many people would the firm employ? _____________ 3. Show these points on your diagram. 4. If the price of the product was to rise to 10 what would happen to the MRP curve? |

5. What would happen to the MRP curve if the productivity of labour (the MPP) fell? |

6. Show both these changes from questions 4 and 5 on your diagram We can see from all this that the MRP curve shows the number of people employed at each wage rate. This means that the MRP curve represents the demand curve for labour. Any change in the productivity of labour or the price of the product will shift the demand curve. Any change in the wage rate and the firm will simply move along the MRP curve and alter the amount of labour they employ.

Formative assessment task Subject: Economics Theme: Grade: 11

: Factor markets

Learning objectives: The learners are able to

Explain the peculiarity of resource markets, particularly the labour market

Criteria: C - Critical Thinking and Research Students do Research and complete Worksheet
Conclusion

Learning objectives

Working

Criteria

Descriptors

Achieved

Not Achieved Achieved Working towards Not Achievd

towards

Learner know what the difference between commodity and factor markets C LO3 Learner understand derived demand

Learner can analyse the theory of Marginal Revenue Product