A. an abnormal supply situation
B. the law of supply
C. that labour supply and wage are directly related
D. that the elasticity of supply is uniform
Correct Answer: Option C
C. that labour supply and wage are directly related
Explanation
The reason is that there are two effects related to determining supply. The substitution effect states that a higher wage makes work more attractive than leisure. … The income effect states that a higher wage means workers can achieve a target income by working fewer hours.
Backward bending supply curve is the normal case for most workers. Most economists agree that a worker’s supply curve for labor slopes upward at lower wages and bends backward at higher wages.
