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the backward bending supply curve of labour indicates?

Economics
WAEC 2018

the backward bending supply curve of labour indicates?

  • A. an abnormal supply situation
  • B. the law of supply
  • C. that labour supply and wage are directly related
  • D. that the elasticity of supply is uniform
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Correct Answer: Option C
Explanation

The reason is that there are two effects related to determining supply. The substitution effect states that a higher wage makes work more attractive than leisure. ... The income effect states that a higher wage means workers can achieve a target income by working fewer hours.

Backward bending supply curve is the normal case for most workers. Most economists agree that a worker's supply curve for labor slopes upward at lower wages and bends backward at higher wages. 


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WAEC offline past questions - with all answers and explanations in one app - Download for free
WAEC May/June 2024 - Practice for Objective & Theory - From 1988 till date, download app now - 99995
WAEC Past Questions, Objective & Theory, Study 100% offline, Download app now - 24709
Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
WAEC May/June 2024 - Practice for Objective & Theory - From 1988 till date, download app now - 99995
Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
WAEC Past Questions, Objective & Theory, Study 100% offline, Download app now - 24709
WAEC offline past questions - with all answers and explanations in one app - Download for free