the backward bending supply curve of labour indicates?
- an abnormal supply situation
- the law of supply
-
that labour supply and wage are directly related
- that the elasticity of supply is uniform
The correct answer is: 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.