Question

How would each of the following affect Helena’s labour supply decision? Be
specific on what happens to her individual labour supply curve.
a) The value of Helena’s home triples in an unexpected hot real estate market.
b) Originally an unskilled worker, Helena acquires skills that give her access to a
higher-paying job.
c) A temporary income tax surcharge raises the percentage of her income that she
must pay in taxes

Answer 1

a) The value of Helena’s home triples in an unexpected hot real estate market - her individual labour supply curve will shift to the left.

b) Originally an unskilled worker, Helena acquires skills that give her access to a higher-paying job - her individual labour supply curve will shift to the left.

c) A temporary income tax surcharge raises the percentage of her income that she must pay in taxes - her individual labour supply curve will shift to the right.