Question

what are the factor(factors) that determine the quantity of labor supplied?

what are the factor(factors) that determine the quantity of labor supplied?

Homework Answers

Answer #1

Quantity of labour supplied depends upon various factors:

  • Wage: This is the primary factor determining labour supplied and varies directly with it. An increase in wages would increase labour supplies and vice versa.
  • Non Labour income: People with greater non labour income tend to work less than those with no income. This is because at higher income levels, the income effect because of non labour income outstrips substitution effect.
  • Non Monetary benefits: When non monetary benefits are lucrative, labour supplied increase despite constant wages.

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