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

Question

Quizplus · Accepted Answer

According to the law of supply, as the price (or opportunity cost) of a good (in this case, leisure) increases, the quantity supplied of that good (in this case, labor) also increases. Therefore, if workers respond to an increase in the opportunity cost of leisure by taking more of it, their labor supply curve must be downward-sloping.

If Workers Respond to an Increase in the Opportunity Cost