The quantity of labor supplied by households depends on factors such as the wage rate, prices, wealth, and nonlabor income.

Question

Quizplus · Accepted Answer

The wage rate, prices, wealth, and nonlabor income all directly or indirectly affect the quantity of labor supplied by households. An increase in wage rate or decrease in prices tends to increase labor supply, while an increase in wealth or nonlabor income tends to decrease labor supply as households may choose to work less or not at all.

The Quantity of Labor Supplied by Households Depends on Factors