E1 1. Why is the demand for labor a deriveddemand? Provide a specific example ofderived demand.2. Explain why it might make perfecteconomic sense to pay a professional athlete$20 million per year.3. In reference to the 20/20 video aboutunderpaid teachers, what kind of jobcharacteristics would lead to teachers toaccept lower wages than they wouldotherwise? What kind of job characteristicswould lead teachers to require higher wagesthan they would otherwise?

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1. Why is the demand for labor a derived demand? Provide a specific example of derived demand.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter19: Earnings And Discrimination

Section: Chapter Questions

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Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

Question

1. Why is the demand for labor a derived
demand? Provide a specific example of
derived demand.
2. Explain why it might make perfect
economic sense to pay a professional athlete
$20 million per year.
3. In reference to the 20/20 video about
underpaid teachers, what kind of job
characteristics would lead to teachers to
accept lower wages than they would
otherwise? What kind of job characteristics
would lead teachers to require higher wages
than they would otherwise?

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