At low wages, the labour supply curve for most people slopes upward because
A)the supply of labour is perfectly inelastic at low wages.
B)as wages increase, the opportunity cost of leisure increases.
C)as wages increase, income also increases unless hours worked decrease.
D)the demand for labour is perfectly elastic at low wages.

Question

Quizplus · Accepted Answer

At low wages, people may not have enough income to meet their basic needs and may need to work more hours to make ends meet. As wages increase, the opportunity cost of taking leisure time becomes higher, and more people may be willing to work additional hours to earn more income. Therefore, the labour supply curve slopes upward at low wages.

At Low Wages, the Labour Supply Curve for Most People