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Derived Demand Definition Example Essays

The demand for healthcare is a derived demand in the sense that it derives its demand from the state of health and awareness among the population of the country about significance of good health. Healthcare services are demanded by people as a means by which people achieve good health that builds the standard of human capital of a nation. Unlike other goods and services which are demanded for consumption, healthcare services are demanded for both consumption as well as for ensuring good health. Thus, health is a capital as well as consumer good. Economic analysis, if applied properly, can often help to clarify what choices are for health policy, how to choose among different health services, how to decide what to buy and how to pay for it, and how to evaluate the end results of such consumption. The indirect effects of good economic thinking, when dealing with such questions as the best use of taxes, insurance and out-of-pocket payment, or the best way for governments to intervene in health, may affect a population’s health and welfare more than decisions about how to combat particular maladies or risk factors. 3 Thus, the main functions of a health economist include: (1) To identify the present and potential areas of health demand, 3 Musgrave Philip (2004), ‘Health Economics in Development’ , The World Bank, Washington DC, p.20.

What Is Meant By The Derived Demand For Labour Why Is The Labour Market Regarded As A Factor Market?

Labour is the human element in the production process. It is the intellectual and physical effort of people in production. The labour market is a factor market where the demand and supply of labour interact to determine the wage rate and the allocation of labour resources in the economy.

The demand for labour is derived form the demand for the goods and services that labour is used to produce. The demand for labour is influenced by the level of economic activity, the productivity of labour and relative cost of labour compared to capital. Supply of labour refers to proportion of wrking age population making itself available for work. In a competitive labour market, the interaction of the demand and supply for labour will determine wage rates and the allocation of labour resources.

The Demand and supply of labour are influenced by both macroeconomic and microeconomic factors. Macroeconomics refer to conditions in the whole economy affecting the general labour market. Microeconomic factors include specific industry and firm conditions that influence the demand and supply of labour for particular occupations and labour skills.

The demand for labour at a microeconomic level are influenced by a number of factors that are industry or firm specific, these include the nature and size of the industry, the pattern of consumer demand and output, the wage rate and conditions of employment offered, the productivity of labour, the rate of capital/labour substitution and the rate of structural change and entrepreneurial expectations.

Large labour intensive industries such as TCF's and service are usually big users of labour. Traditionally industries like mining and building were labour intensive jobs but in developed countries these industries have turned to being capital intensive industries. The nature of an industry's output also influences the quality of labour demanded; for e.g. professional and unskilled worker.

Since the demand for labour is derived form the demand for final goods and services a change in the pattern of consumer demand will affect the demand for labour. A decline in the demand for wool may lead to less wool workers being employed.

The wage rate and conditions of employment offered in industries affect the demand for labour. More profitable industries with job security and future prospects...

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Labour Market Need Essay

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How Wages are Determined in a Perfectly Competitive Labour Market

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Weather management can control all the factors influencing demand for and supply of labour.

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Changes in the business environment and labour market affect Human Resource Planning (HRP).

1980 words - 8 pages By looking out the definitions of HRP from Dessler (1999), Stone (2002), and Schuler (1998), HRP can be defined as the systematic and continuous process to ensure that organization's human resource needs are fulfilled by ensuring that the right people with the correct skills are available when required. Shortly, HRP is...

How has the labour market 'deregulation' contributed to Australia's productivity growth?

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Market Demand

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Change in Australian Labour Market: Increasing Work Opportunity to Women

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