Along an upward sloping labour supply curve, as the wage rate increases, the opportunity cost of leisure ________, causing individuals to supply a ________ quantity of labour.
A)increases; greater
B)increases; lower
C)decreases; greater
D)remains constant, constant

Question

Quizplus · Accepted Answer

Along an upward sloping labour supply curve, as the wage rate increases, the opportunity cost of leisure increases, as individuals have to forgo more leisure time to work. This, in turn, causes individuals to supply a greater quantity of labour in order to maximize their earnings. Hence, option A is correct.

Along an Upward Sloping Labour Supply Curve, as the Wage