The following figure shows the weekly income (in dollars) and leisure (in hours) of a worker using an indifference curve and a budget line.
Figure 17-1
-Refer to Figure 17-1.If the number of leisure hours is OL₃ after a change in the wage rate,the individual's supply curve of labor will be _____.

Question

The following figure shows the weekly income (in dollars) and leisure (in hours) of a worker using an indifference curve and a budget line.
Figure 17-1

-Refer to Figure 17-1.If the number of leisure hours is OL₃ after a change in the wage rate,the individual's supply curve of labor will be _____.

Quizplus · Accepted Answer

When the number of leisure hours increases from OLS1 to OL₃, the individual experiences a backward bending supply curve of labor, where the quantity of labor supplied decreases as the wage rate increases beyond a certain point. This is because as the wage rate increases, the individual enjoys the option to substitute leisure for work, leading to a decrease in the quantity of labor supplied.

The Following Figure Shows the Weekly Income (In Dollars)and Leisure