An individual's labour supply curve shows
A) the maximum wage rates offered to that individual by various potential employers.
B) the relationship between wages and the quantity of labour that she is willing to supply.
C) the relationship between wages and the quantity of labour that a firm is willing to employ.
D) the relationship between the quantity of hours worked and total income earned by that individual.

Question

Quizplus · Accepted Answer

An individual's labour supply curve shows the relationship between wages and the quantity of labour that she is willing to supply. This means that as wages increase, the individual may be willing to supply more labour hours, and as wages decrease, the individual may be willing to supply less labour hours. Therefore, the labour supply curve is an upward sloping curve. The maximum wage rates offered to the individual by various potential employers (A) are not necessarily reflected in the labour supply curve, as the individual may have personal preferences and circumstances that affect their willingness to work at different wage rates. The relationship between wages and the quantity of labour that a firm is willing to employ (C) is shown by the firm's labour demand curve, not the individual's labour supply curve. The relationship between the quantity of hours worked and total income earned by that individual (D) is shown by the individual's budget constraint or income-consumption curve, not the labour supply curve.

An Individual's Labour Supply Curve Shows