Market labor supply curves are generally:
A)upward sloping,as higher wages attract workers away from their next best alternatives
B)backward-bending,as the substitution effect of higher wages outweighs the income effect
C)vertical at any particular point in time
D)perfectly elastic at the market wage rate

Question

Quizplus · Accepted Answer

Market labor supply curves are upward sloping because as wages increase, workers are attracted away from their next best alternatives (such as leisure or other jobs) and toward the higher-paying job. This is known as the substitution effect, and it dominates the income effect in the upward slope of the labor supply curve.

Market Labor Supply Curves Are Generally