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What is one explanation for why this labor supply curve is upward sloping over the range of wages from low wage to high wage?

User Winand
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Answer:

Option 1 - the opportunity cost of leisure decreases as wages decrease.

Step-by-step explanation:

The labour supply curve of any occupation will always be upward sloping because when wages, (the opportunity cost of leisure) rises, the more hours of leisure a staff will relinquish to do more work.

The opposite of this is true as seen in option 1 of the question.

Opportunity costs will reduce with a consequent reduction in average wages. When fewer people want to retain their employment due to decrease in wage rates, it would lead to a fall in demand for leisure.

User Mike Bjorge
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