ECO 205 Week 5 DQ 2 - 7519

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    Labor supply is affected by migration to a certain area. If developers build a new subdivision outside of Denver, the stores in close proximity to the subdivision will have a influx of labor. Labor supply is also affected by alternative opportunities. If two grocery store in the same area are hiring, the store with the higher wage will get more applicants, causing the other store to raise their wages to meet the new equilibrium point or struggle finding help. Labor demand is affected by the selling price of the product. If the selling price of shirts increases, a clothing factory worker’s value of marginal product increases, so the employee is has a higher marginal profit. The company can hire more workers because the profit margin is higher. Labor demand also changes from technology advances which changes the value of marginal product because the workers produce more. The products still cost the same, however workers can produce more, therefore making the workers more profitable. A company can then hire more. Using economic principles, describe how changes in the labor market have affected you or someone you know. Change in labor supply from alternative opportunities makes it hard for our business to hire people. There is an energy boom in our state, making high paying jobs fairly easy to find. Our company hires the same kind of people: inexperienced and uneducated. We have a high turnover rate so it makes hiring a constant dilemma. There is no way we can compete with national companies paying people to risk injury in the gas and oil fields. We are a small business with fairly easy work. We focus on the trade off, finding people who value their leisure time.

 

Solution Description

 

    Labor supply is affected by migration to a certain area. If developers build a new subdivision outside of Denver, the stores in close proximity to the subdivision will have a influx of labor. Labor supply is also affected by alter