Question

The labor supply curve shows how many workers are willing to work A. in a particular industry. B. in a particular industry. C. at the minimum wage. D. at any given wage. E. in order to maximize the firm's profit.

Answer 1

Answer:

A is the correct option.

Explanation:

It shows the number of workers who are willing and able to work in a particular occupation at different wages. Various factors affect the supply of labor. The two factors are the substitution effect of a rise in wages and the income effect of a rise in wages. According to the substitution supply, if the wages are higher then the workers will value work instead of leisure. It causes the labor to work for more hours as the wags rise. The income effect occurs when the increase in wages causes the workers to work for fewer hours because the workers get a higher income by working fewer hours and hence may work less.