In 2008 1543 million workers were in the US labor force of w

In 2008 154.3 million workers were in the US labor force, of which 8.8 million were unemployed In view of these facts how can economists say that labor is a scarce resource? Why must the concepts of supply and demand as they pertain to product markets be modified when applied to labor markets? What is the relative importance of labor as an economic resource? Why are indifference curves downward sloping and convex to the origin? 1. 2. 3. 4.

Solution

1) Labor is a scarce resource when it comes to skill set requirements . Unskilled workers maybe abundant in the economy but workers with a particular skill set requirement or workers required for highly skilled job and job requiring lot of knowledge maybe scarce since this kind of labor depends on level of education and training available in the country .