Question
The supply curve of labour is backward bending.
✓
Answer
Yes, I agree with this statement.
- When the wage rate in the industry rises, the supply of labour (i.e., hours of work) rises upto a certain limit.
- Beyond certain limit with further rise in wages, supply of labour tends to fall.
- This is because the labour prefers leisure to work i.e., he substitutes work with leisure,
- With the increased wage rate he is able to satisfy his needs.
- So the supply curve instead of rising upwards
starts sloping backward as he reduces the hours of work.
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