Wage Changes and the Slope of the Supply Curve What would any one individual’s supply curve for labor look like? One possibility is that over some range of labor hours supplied, the substitution effect will dominate Because the marginal utility of leisure is relatively low when little labor is supplied (that is, when most time is devoted to leisure), it takes only a small increase in wages to induce the individual to substitute more labor for less leisure Further, because few hours are worked, the income effect of those wage changes will be small Figure 12.8 "A Backward-Bending Supply Curve for Labor" shows Meredith Wilson’s supply curve for labor At a wage of $10 per hour, she supplies 42 hours of work per week (point A) An increase in her wage to $15 per hour boosts her quantity supplied to 48 hours per week (point B) The substitution effect thus dominates the income effect of a higher wage Figure 12.8 A Backward-Bending Supply Curve for Labor Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 646