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Figure 2.11 Deriving the Individual Supply Curve of Labour 

Figure 2.11 Deriving the Individual Supply Curve of Labour 

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Income effects

dominates, labour

supply decreases

Substitution effects

dominate, labour

supply increases



© 2017 McGraw-Hill Education Ltd.



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Testing the Model of Labour Supply

Two Research Questions

1. Does labour supply behaviour conform to the



predictions of economic theory,

2. How responsive is labour supply to changes in

the wage?



© 2017 McGraw-Hill Education Ltd.



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© 2017 McGraw-Hill Education Ltd.



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Figure 2.11 Deriving the Individual Supply Curve of Labour 

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