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10 marksThe Demand for and Supply of Factors

CAPE Economics Unit 1 · 2011 · Paper 2 · Question 5(b)(ii)

With the aid of a diagram, explain how the wage rate and the value of marginal product of labour determine the quantity of labour hired by a firm.

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Other parts of this question

  1. 5(a)Identify the rewards accruing to the owners of each factor of production: land, labour, capital, and enterprise.[4 marks]
  2. 5(b)(i)Define wage rate and marginal product, and explain the importance of each to a firm.[6 marks]
  3. 5(c)Explain the relationship between the value of the marginal product of labour and the firm's labour demand curve.[5 marks]

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