Question

Write short note on Labour supply curve.

Answer 1

In economics, a backward-bendingsupply curve of labour, or backward-bending labour supply curve, is a graphical device showing a situation in which as real, or 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 ...

Answer 2

Explanation:

The supply of labour is the maximum number of hours worked at a given actual pay rate and the labour supply curve is a graphical tool that displays a situation where actual incomes rise above a certain level.

• The supply curve is a backward bending curve. Supply decreases in response to higher wages as work gives lower remuneration. The effect on earnings indicates that higher wages mean that employees can reach a minimum salary by working less hours.
• A shift in the demand curve causes a difference in anything else which influences labour demand like the shifts in efficiency, improvements in the production process that use more or less energy, government regulation. Shifts in the wage rate allow the demand curve to change.