Respuesta :

An individual worker is on the backward bending portion of her labor supply curve. then for a wage increase the income effect is stronger than the substitution effect.

What is backward-bending supply curve?

A backward-bending supply curve of labor, also known as a backward-bending labour supply curve, is a graphical representation of the situation where, as real wages rise above a certain point, people will start to substitute leisure for paid work time. As a result, higher wages result in a decrease in the labour supply, and less labor is available for hire.

What causes backward bending labor supply curve?

However, the backward-bending labor supply curve appears when an even higher income actually encourages people to work less and consume more leisure or unpaid time.

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