Question

1. Explain very thoroughly why the supply curve for labor is upward sloping in an industry

1. Explain very thoroughly why the supply curve for labor is upward sloping in an industry

Homework Answers

Answer #1

The labour supply is the number of hours people are willing and able to supply at a given wage rate.

  • It is the number of workers willing and able to work in a particular job or industry for a given wage
  • The labour supply curve for any industry or occupation will be upward sloping. This is because, as wages rise, other workers enter this industry attracted by the incentive of higher rewards. They may have moved from other industries or they may not have previously held a job, such as housewives or the unemployed
  • The extent to which a rise in the prevailing wage or salary in an occupation leads to an expansion in the supply of labour depends on the elasticity of labour supply.
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