Question

Using your own words, define the terms below:

1.price floor

2.minimum wage

3.labor

4.demand for labor

5.market surplus

Answer 1

Price floor:-

• It is the smallest legitimate price a material can be sold.
• They are used by the government to block prices from being too low .

Common price floor is the wage, the minimum price that can be paid for labor.for a price floor to be successful.,it must be above the balanced price.

Minimum wage:-

• Minimum amount of money that an employer is essential to pay wage earners for the work carried out during a given period.
• Cannot be reduced by group agreement or an individual agreement.

It is the smallest alternate amount an employer legitimately pay an employee..

Labour:-

• Human, physical and mental effort used in creating goods and services.
• Labour is a factor of production.

Productive activity for the sake of Economic gain.

Demand for labor:-

• A concept that describes the amount of demand for labor than an Economy is willing to employ at a given time.
• In . Economics the labour demand is the number of labor hours that an employer is willing to hire on various variables.

The quantity of labor demanded at various possible values is called labour demand.

Market surplus:-

• It occurs when there is desirable supply.
• Quantity supply is greater than demanded.
• In this condition the producers cannot sell their goods.

This will persuade them to lower their price to make their product more attractive.