Read the following statements - Assertion (A) and Reasoning (R):
Assertion: Even though the individual labour supply curve is backward bending, market supply curve is upward sloping.
Reasoning: Though at higher wages some individuals may be willing to work less, many more individuals will be attracted to supply more labour.
Answer & explanation
Correct answer: option 3
The correct answer is Option 3: Both Assertion (A) and Reasoning (R) are true and Reasoning (R) is the correct explanation of Assertion (A).
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Assertion (A): Even though the individual labor supply curve is backward bending, the market supply curve is upward sloping.
- ✅ True → The individual labor supply curve bends backward at high wages because some workers prefer more leisure over additional income.
- However, at the market level, the labor supply curve remains upward sloping because new workers enter the labor force as wages rise.
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Reasoning (R): Though at higher wages some individuals may be willing to work less, many more individuals will be attracted to supply more labor.
- ✅ True → While some workers reduce their working hours at higher wages, new workers are drawn into the labor market due to the higher pay, leading to an overall increase in labor supply.
Since the reasoning correctly explains why the market labor supply curve remains upward sloping, the correct answer is: Both Assertion (A) and Reasoning (R) are true and Reasoning (R) is the correct explanation of Assertion (A).