What does an upward-sloping individual labour supply curve indicate
A)dominant income effects
B)dominant substitution effects
C)individuals that reduce work effort (hours) as income rises
D)individuals that increase work efforts (hours) as income falls

Question

Quizplus · Accepted Answer

An upward-sloping individual labour supply curve indicates that individuals are more likely to work more (increase their work efforts in terms of hours) as their wages rise, and vice versa. This implies that the dominant effect of a wage increase is substitution effect, where individuals substitute leisure with work as the opportunity cost of leisure increases with higher wages.

What Does an Upward-Sloping Individual Labour Supply Curve Indicate