Do you think that the individual labor curve is backing bending? Give a reason for your answer. In about 250 words.
Answers
Answer:
In economics, a backward-bending supply curve of labour, or backward-bending labour supply curve, is a graphical device showing a situation in which as real (inflation-corrected) wages increase beyond a certain level, people will substitute leisure (non-paid time) for paid worktime and so higher wages lead to a decrease in the labour supply and so less labour-time being offered for sale.[1]
The "labour-leisure" tradeoff is the tradeoff faced by wage-earning human beings between the amount of time spent engaged in wage-paying work (assumed to be unpleasant) and satisfaction-generating unpaid time, which allows participation in "leisure" activities and the use of time to do necessary self-maintenance, such as sleep. The key to the tradeoff is a comparison between the wage received from each hour of working and the amount of satisfaction generated by the use of unpaid time.
Such a comparison generally means that a higher wage entices people to spend more time working for pay; the substitution effect implies a positively sloped labour supply curve. However, the backward-bending labour supply curve occurs when an even higher wage actually entices people to work less and consume more leisure or unpaid time.
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Answer:
Explanation:
By the end of this section, you will be able to:
Interpret labor-leisure budget constraint graphs
Predict consumer choices based on wages and other compensation
Explain the backward-bending supply curve of labor