Question

Explain two factors on which the supply of labour depends.

Answer 1

Factors determining the supply of labour:

1. Population: The most important factor affecting the supply of labour in a country is its population. A larger population with the necessary skills to perform physical or mental work will increase the supply of labour to the market.
2. Age structure: The total population of an economy is not considered the supply of labour. The supply of labour depends on the age structure of the population. Legally, age is determined to work and not work. Child labour is prohibited by law. Salaried people have to retire after attaining a certain age. Hence, only a certain age group of people is considered the supply of people.

Answer 2

Two factors on which the supply of labour depends are:

1. The size of the population in the country.
2. The percentage of the population in the working age range and the wage rate.