In: Economics
You should assume this is a fairly permanent job, so do your best to imagine your real decision-making process. On the horizontal axis is (for this question, use “quantity of hours per week” from zero to 100) and on the vertical axis, each wage (for this question, use “annual salary” from zero to $200,000 in increments of $10,000) . Estimate your actual labor supply curve for each salary point from $10,000 to $200,000 in increments of $10,000.
Explain three events that would shift your labor supply curve.
For the diagram, equation of labor supply is needed. But roughly, it would be like this:
Factors that shift labor supply curve are:
1) Increase in population : this can happen due to immigration so that more labor force is present. Increase in the population would shift the labor supply curve to the right whereas decrease in population would shift the labor curve to the left.
2) change in preference or income: If a person has won a lottery of $100,000 then this would mean he would be less likely to work. Thus, increase in income of individual or decrease in their preference toward leisure would shift the supply curve to the left.
3) when price of other goods and services change: if, for example the price of child daycare facilities are high, this means the spouse will not be able to get employed, hence supply curve shifts to the left