Given below are 2 sets of statements in column I and column II. Match the statements in different columns (column 1 and 2) to make a correct pair.
Column I
i. Individual labour supply curve
ii. Individual demand curve for labour
iii. Market equilibrium
iv. Market labour supply curve
Column II
a) Backward bending
b) Upward sloping
c) Downward sloping
d) No excess demand and no excess supply
Alternatives:

i-a, ii-c, iii-d, iv-b

The correct answer is Option 2: i-a, ii-c, iii-d, iv-b

• i. Individual labour supply curve → a) Backward bending ✅

  • Initially, as wages increase, individuals are willing to supply more labour because of the higher earnings.
  • However, at very high wages, individuals prefer more leisure over extra work, causing the supply curve to bend backward.

• ii. Individual demand curve for labour → c) Downward sloping ✅

  • Firms demand less labour at higher wages because increased wages raise production costs.
  • Conversely, firms hire more labour at lower wages, making the demand curve downward sloping.

• iii. Market equilibrium → d) No excess demand and no excess supply ✅

  • Equilibrium occurs where labour demand equals labour supply, meaning no surplus or shortage of workers.
  • At this point, wages are stable, and all firms find workers at the prevailing wage rate.

• iv. Market labour supply curve → b) Upward sloping ✅

  • As wages increase, more workers are willing to work, leading to an increase in labour supply.
  • This makes the market labour supply curve upward sloping.