Question x C Solved Consider the ldX Q libor Fiashoad | Aplia: Stutent Solved: C

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Question x C Solved Consider the ldX Q libor Fiashoad | Aplia: Stutent Solved: Consider the lat × Flashcard Quidlet C courses.aplia.com/af/servlet/quizquiz ac ion tai eautiqu zprobGud plia aBC Econ 81 (Micro) Fall 2017 Unit #3 Exam g: 85 minutes Back to Assignment Attempts Score: /5 Which of the following best explains the shape of the individual labor-supply curve? portve slop4- a. The individual labor-supply ourve id xactly hke any supply curve, it always har b·Th.e individual labor-supply curve must be horizontal bacsure labor markets are 6.sumed to b. peddly conven" ch penen an verk only eight herned The individual labor-rupply curve must be vertical becaur ai "bge. ino ", people r" able to buy more lenn Iope, dewnward at a vage ,ate, because. d· Th -individual labor-supply cure. ®. Tie individual labor. supply curve slopes upward at love, vage rater .ndchen bend, back at h gher ..se Copyright NoticesTarms of Un

Explanation / Answer

e. is the correct answer

labor supply has a backward bending curve. As visas increases there are two effects to be considered one is substitution effect and other is income effect. Initially there is trade off between working and Leisure hence morava of working time will be given at the higher wage rate than at the lower wage rate. The second effect is income effect which encourages Leisure to be choosen over working. hence the curve is backward bending.

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