Question

4. The supply of labour function is upward sloping because as the real wage rate increases:

(i) the opportunity cost of working increases.

(ii) the opportunity cost of leisure increases.

(iii) diminishing marginal product of labour occurs.

A. Only (i) is correct.

B. Only (ii) is correct.

C. Only (i) and (iii) is correct.

D. Only (ii) and (iii) are correct.

Answer 1

D. Only (ii) and (iii) are correct.