Labor supply curve is upward sloping

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Question

In Providence, 135 people are willing to spend an hour working as pizza makers for an hourly wage of $5. For each additional $5 that the wage increases above $5, an additional 45 people are willing to spend an hour working. For hourly wages of $5, $10, $15, $20, and $25, plot the daily labor supply curve for pizza makers on the following graph. Supply 0 45 90 135 180 225 270 315 360 405 450 50 45 40 35 30 25 20 15 10 5 0 WAGE (Dollars per hour) LABOR (Number of workers) 315, 25 What is one explanation for why this labor supply curve is upward sloping? The opportunity cost of leisure increases as wages increase. People prefer to spend time doing leisure activities rather than working. Labor production functions exhibit diminishing marginal returns. Unemployment benefits are steadily declining.

Reference no: EM134046104

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