The Individual and Market Supply of Labor
Panel A: For a wage between $7 and $16 an hour, Joe works 40 hours a week. For $20 an hour, however, Joe is willing to work 50 hours a week, but as the wage increases, Joe takes more of his income in the form of leisure and works less—thus, over a higher range, Joe’s labor supply curve may be backward-bending.
Panel B: The labor supply curve for the market is positively sloped throughout because even if Joe works less as the wage rises (over some range), many other workers enter the office cleaning industry as the wage rises.
Panel A: For a wage between $7 and $16 an hour, Joe works 40 hours a week. For $20 an hour, however, Joe is willing to work 50 hours a week, but as the wage increases, Joe takes more of his income in the form of leisure and works less—thus, over a higher range, Joe’s labor supply curve may be backward-bending.
Panel B: The labor supply curve for the market is positively sloped throughout because even if Joe works less as the wage rises (over some range), many other workers enter the office cleaning industry as the wage rises.