Final answer:
The labor supply curve (WS) is upward sloping (option B), as workers are willing to supply more labor when the real wage rate increases. The labor demand curve (PS) is downward sloping, which indicates that as wages increase, the demand for labor decreases according to the law of demand.
Step-by-step explanation:
The question is asking about the relationship between the real wage and the quantity of labor N, specifically inquiring about the slope of the labor supply curve (WS) and the labor demand curve (PS). From economic principles, we know that the labor supply curve is generally upward sloping, which corresponds to option B, because as the real wage rate increases, workers are typically willing to supply more labor, due to both the income effect and the substitution effect. When the substitution effect (the tendency of people to substitute leisure for labor when wages rise, making work relatively more rewarding) is larger than the income effect (the tendency of people to want more leisure as their income increases), the supply curve will have a normal upward slope.
Similarly, the labor demand curve is downward sloping, which aligns with the mnemonic that both 'down' and 'demand' start with 'D'. Hence, according to these economic principles, option A would be incorrect, as the labor demand curve (PS) would not be downward sloping. Instead, with real wage on the vertical axis and N (quantity of labor) on the horizontal axis, the supply of labor is upward sloping, and the labor demand is downward sloping due to the law of demand.