This topic contains a solution. Click here to go to the answer

Author Question: Why does the labor supply curve eventually bend backwards? What will be an ideal ... (Read 39 times)

imowrer

  • Hero Member
  • *****
  • Posts: 514
Why does the labor supply curve eventually bend backwards?
 
  What will be an ideal response?

Question 2

Assume that two countries are considering trading with each other for the first time. Also assume that one of the countries has an absolute disadvantage in producing everything compared to the other country.
 
  How would it still be possible for these two nations to benefit from trade with each other?



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

JaynaD87

  • Sr. Member
  • ****
  • Posts: 368
Answer to Question 1

The wage rate represents the opportunity cost of leisure. Starting from a relatively low wage, as the wage increases, leisure becomes more expensive and so workers substitute labor for leisure. As a result, a higher wage means less leisure and more labor and the supply curve is positively sloped. At a sufficiently high wage, however, the worker's income is high enough that, even though leisure has gone up in price, the worker can afford to buy more leisure by working less. So, at a high wage, the labor supply curve becomes negatively sloped.

Answer to Question 2

The reason that it would still be beneficial for each nation to trade with each other is because trade is not dependent on absolute advantage but rather comparative advantage. That means that one nation may be operating at an absolute disadvantage vis--vis another nation but still have a comparative advantage in at least one good or service.




imowrer

  • Member
  • Posts: 514
Reply 2 on: Jun 29, 2018
:D TYSM


dyrone

  • Member
  • Posts: 322
Reply 3 on: Yesterday
Wow, this really help

 

Did you know?

More than 34,000 trademarked medication names and more than 10,000 generic medication names are in use in the United States.

Did you know?

It is believed that humans initially contracted crabs from gorillas about 3 million years ago from either sleeping in gorilla nests or eating the apes.

Did you know?

Eating carrots will improve your eyesight. Carrots are high in vitamin A (retinol), which is essential for good vision. It can also be found in milk, cheese, egg yolks, and liver.

Did you know?

People who have myopia, or nearsightedness, are not able to see objects at a distance but only up close. It occurs when the cornea is either curved too steeply, the eye is too long, or both. This condition is progressive and worsens with time. More than 100 million people in the United States are nearsighted, but only 20% of those are born with the condition. Diet, eye exercise, drug therapy, and corrective lenses can all help manage nearsightedness.

Did you know?

Only 12 hours after an egg cell is fertilized by a sperm cell, the egg cell starts to divide. As it continues to divide, it moves along the fallopian tube toward the uterus at about 1 inch per day.

For a complete list of videos, visit our video library