The supply of labour depends primarily on
A)the marginal productivity of workers in the economy.
B)the quantity of capital that workers can work with.
C)the amount of human capital that workers can supply on the job.
D)the trade-off between labour income and leisure.

Question

Quizplus · Accepted Answer

The supply of labour primarily depends on the trade-off between labour income and leisure because an increase in labour income could increase the supply of labour as workers will be willing to work more to earn higher wages. On the other hand, an increase in leisure, such as by reducing working hours, could decrease the supply of labour as workers have more time to enjoy leisure activities. Marginal productivity, quantity of capital, and human capital can also affect labour supply, but they are secondary factors compared to the trade-off between labour income and leisure.

The Supply of Labour Depends Primarily on