Figure19-11The Individual Labour Supply Curve When the substitution effect of a wage increase dominates the income effect, the individual labour supply curve slopes upward, as in panel (a). Here a rise in the wage rate from $10 to $20 per hour increases the number of hours worked from 40 to 50. But when the income effect of a wage increase dominates the substitution effect, the individual labour supply curve slopes downward, as in panel (b). Here the same rise in the wage rate reduces the number of hours worked from 40 to 30. The individual labour supply curve shows how the quantity of labour supplied by an individual depends on that individual’s wage rate.