Explain and show what determines the demand for labour by a perfectly Essay

Explain and show what determines the demand for labour by a perfectly competitive firm - Essay Example Labour, is one of the main inputs, along with land, capital and entrepreneurship. The demand for all inputs such as labour is a derived demand. Derived from the output the given factors are used to produce (Begg D., Fischer S. and Dornbusch R., 2000:176). Firms will use labour and capital and focus on either labour intensive method or capital-intensive methods for production. In the short run, it is assumed that capital is fixed and labour is variable. Accordingly, the demand for labour is based on the profit maximising condition, which can be stated in two ways (Begg D., Fischer S. and Dornbusch R., 2000:178). It can be seen that the MPP (which refers to the output of every extra unit of labour) increases from 0.8 to 1 when labour is increased from 1 worker to 2 workers. However, from the 3rd worker onwards MPP begins to decrease. This is explained by the law of diminishing returns, which states that if increasing quantities of variable input are applied to a given quantity of a fixed input, the marginal product, and the average product of the variable input will eventually decrease (Lipsey and Chrystal, 2004:135). However, the firm can continue to add up to 7 workers and still maintain a profit. Thus satisfying the profit maximising requirements since the MRP (obtained by multiplying the MPP by the unit price of the good, which is assumed as â‚ ¬ 500) is higher than Average Variable Cost, which is the wage rate. However, if an 8th worker were to be hired, the AVC will be higher than the MRP, thus the profit maximising condition would be violated. The firm will therefore not expand its labour force to 8 workers (7.5 units of MPP) since the cost of this expansion will be greater than the revenue. At point B, the MRP is at W1 and employment is at L1. The revenue generated by the extra employment is higher than the labour cost since it above the wage

SPE 565 Essay Example | Topics and Well Written Essays - 750 words

SPE 565 - Essay Example These are social-cognitive theory by Bandura, 1991, Theory of Planned Behaviour by Azjen, 1991 and Theory of Interpersonal Behaviour by Triandis, 1981. (Bandura, 1997) defined social-cognitive as a theory that "explains how people acquire and maintain certain behavioural patterns, while also providing the basis for intervention strategies" (n.p.). The factors to be considered to evaluate behavioural change are the people, environment, and behaviour. This social cognition model focuses on self-efficacy expectancies or beliefs about a person's ability to perform certain behaviour. A framework for designing, implementing and evaluating programs are being offered in social-cognitive theory. To better analyze this social cognition model, analysis of the pros and cons when this model is used should be presented. SCT is an important and effective means for educators in assisting the students to gain new supporting skills by developing feelings of self-efficacy from their own mastery experiences. SLT can help educators determine why certain learning activities work, and why other activities aren't very effective as the students may receive standard persuasive techniques to try to instil feelings of self-efficacy. ... It is believed that all of the people are able of doing critical thinking, in spite of their differences. Additionally, social cognitive theory encourages the use of non-traditional methods of learning instructions and evaluations, which involves a major time commitment on the part of the expert using the model. Theory of Planned Behaviour (TPB) evaluated: The theory of planned behaviour is a theory about the relation between behaviour and attitudes. It was projected by Icek Ajzen as an annex of the theory of reasoned action (TRA). It is one of the most prognostic persuasion theories. As (Wikipedia, 2007), "it has been applied to studies of the relations among beliefs, attitudes, behavioural intentions and behaviours in various fields such as advertising, public relations, campaigns, healthcare, etc." (n.p.). TPB can cover people's intentional behaviour which Theory of Reasoned Action cannot explain. TPB would help better forecast health-related behavioural intention as it improves the predictability of intentions. It can give explanation to individual's social behaviours by viewing social norms as important factors. However, TPB fails to notice emotional factors and may only provide limited assessment on these areas. Theory of Interpersonal Behaviour (TIB) - Triandis Theory This model is based on TRA and TPB although based on (Davis et al., 1992) "efforts towards developing models that incorporate a non-utilitarian aspect of technology acceptance have been made" (pp 1111-1132). Hence, it does not distinguish the emotional from the cognitive domain and promotes assumption that an individual is positioned on the dimension of both emotional and cognitive bipolar in terms of evaluation. Triandis theory of interpersonal