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 40 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


essyface1

  • Member
  • Posts: 347
Reply 3 on: Yesterday
Gracias!

 

Did you know?

The B-complex vitamins and vitamin C are not stored in the body and must be replaced each day.

Did you know?

Vampire bats have a natural anticoagulant in their saliva that permits continuous bleeding after they painlessly open a wound with their incisors. This capillary blood does not cause any significant blood loss to their victims.

Did you know?

There are more nerve cells in one human brain than there are stars in the Milky Way.

Did you know?

The human body's pharmacokinetics are quite varied. Our hair holds onto drugs longer than our urine, blood, or saliva. For example, alcohol can be detected in the hair for up to 90 days after it was consumed. The same is true for marijuana, cocaine, ecstasy, heroin, methamphetamine, and nicotine.

Did you know?

Children with strabismus (crossed eyes) can be treated. They are not able to outgrow this condition on their own, but with help, it can be more easily corrected at a younger age. It is important for infants to have eye examinations as early as possible in their development and then another at age 2 years.

For a complete list of videos, visit our video library