If workers respond to an increase in the opportunity cost of leisure by taking more leisure,then their labor supply curve is

Question

Quizplus · Accepted Answer

The law of supply states that as the price of a good or service increases, the quantity supplied of that good or service also increases. Similarly, as the opportunity cost of leisure increases (i.e. when the wage rate increases), workers will tend to supply more labor. This implies that the labor supply curve has a negative slope, or is downward sloping. On the other hand, if workers respond to an increase in the opportunity cost of leisure by taking more leisure, then the labor supply curve would have a positive slope, or be upward sloping (which is not the case here). Therefore, the correct answer is B) downward sloping.

If Workers Respond to an Increase in the Opportunity Cost