Practicing Success
From the following due to which reason with increase in wage rate, labour supply curve is backward bending. |
ii, iv i, ii, iii i,iii, iv iv |
ii, iv |
First, due to the increase in wage rate, the opportunity cost of leisure increases which makes leisure costlier. Therefore, the individual will want to enjoy less leisure. As a result, they will work for longer hours. Second, because of the increase in wage rate, the purchasing power of the individual increases. So, he would want to spend more on leisure activities. |