Hicks-Marshall laws of derived demand
- Hicks-Marshall laws of derived demand
In economics, the Hicks-Marshall laws of derived demand assert that, other things equal, the own-wage elasticity of demand for a category of labor is high under the following conditions:
* When the price elasticity of demand for the product being produced is high (scale effect). So when final product demand is elastic, an increase in wages will lead to a large change in the quantity of the final product demanded affecting employment greatly.
* When other factors of production can be easily substituted for the category of labor (substitution effect).
* When the supply of other factors of production is highly elastic (that is, usage of other factors of production can be increased without substantially increasing their prices) (substitution effect). That is, employers cannot easily replace labor as doing so will lead to a large increase in other factor prices making it useless.
* When the cost of employing the category of labor is a large share of the total costs of production (scale effect)
The "Hicks-Marshall" is named for economists John Hicks and Alfred Marshall.
Wikimedia Foundation.
2010.
Look at other dictionaries:
Marginalism — Economics … Wikipedia
United States — a republic in the N Western Hemisphere comprising 48 conterminous states, the District of Columbia, and Alaska in North America, and Hawaii in the N Pacific. 267,954,767; conterminous United States, 3,022,387 sq. mi. (7,827,982 sq. km); with… … Universalium
Marginal utility — In economics, the marginal utility of a good or service is the utility gained (or lost) from an increase (or decrease) in the consumption of that good or service. Economists sometimes speak of a law of diminishing marginal utility, meaning that… … Wikipedia
History of economic thought — The history of economic thought deals with different thinkers and theories in the field of political economy and economics from the ancient world to the present day. British philosopher Adam Smith is cited by many as the father of modern… … Wikipedia
performing arts — arts or skills that require public performance, as acting, singing, or dancing. [1945 50] * * * ▪ 2009 Introduction Music Classical. The last vestiges of the Cold War seemed to thaw for a moment on Feb. 26, 2008, when the unfamiliar strains … Universalium
utility and value — ▪ economics Introduction in economics, the determination of the prices of goods and services. The modern industrial economy is characterized by a high degree of interdependence of its parts. The supplier of components or raw materials … Universalium
Medical cannabis — American Cannabis Indica purchased at a Medical Cannabis dispensary … Wikipedia
History of Medicine — History of Medicine † Catholic Encyclopedia ► History of Medicine The history of medical science, considered as a part of the general history of civilization, should logically begin in Mesopotamia, where tradition and philological… … Catholic encyclopedia
Gordon Brown — This article is about the former UK Prime Minister. For other people with the same name, see Gordon Brown (disambiguation). The Right Honourable Gordon Brown MP … Wikipedia
Piracy — This article is about maritime piracy. For other uses, see Pirate (disambiguation). The traditional Jolly Roger of piracy … Wikipedia