Your college roommate receives a pay raise at her part-time job from $9 to $11 per hour. She used to work 25 hours per week, but now she decides to work 20 hours per week in order to spend more time studying economics. For this price range, her labor supply curve is

Question

Quizplus · Accepted Answer

The labor supply curve is backward sloping in this scenario because as the wage rate increases from $9 to $11, the quantity of labor supplied decreases from 25 hours to 20 hours. This indicates a negative relationship between wage rate and hours worked, characteristic of a backward sloping labor supply curve.

Your College Roommate Receives a Pay Raise at Her Part-Time