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Question
Macroeconomics
Posted 5 months ago
Which of the following best describes the behavior that creates a labor supply curve?
Choose 1 answer:
(A) an individual maximizing utility in choosing between labor and leisure
(B) an individual maximizing utility by choosing what goods to consume
(C) a firm comparing the marginal revenue product of labor to the price of labor
(D) a country choosing a point on its production possibilities curve
(E) a firm choosing its output to maximize profit
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Answer from Sia
Posted 5 months ago
Answer
a
The labor supply curve represents the relationship between the wage rate and the quantity of labor that workers are willing to supply
b
Option A is correct because the labor supply curve is derived from individuals making choices about how much labor to supply given their preferences for leisure and income
Option A: an individual maximizing utility in choosing between labor and leisure
Key Concept
Labor Supply Curve
Explanation
The labor supply curve is created by individuals' decisions to allocate time between labor and leisure, aiming to maximize their utility.
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