Refer to the diagram above. What is the significance of the point at the top of the backward bending of the supply curve marked L3? Question 2 options: as wages increase over this range, the quantity of hours worked also increases. as wages increase over this range, the quantity of hours worked changes very little. as wages increase of this range, the quantity of hours worked is more inelastic. as wages increase over this range, the quantity of hours worked actually decreases. The image contains a graph illustrating the concept of individual labor supply. The axes and curves are described as follows:**Axes:**- The vertical axis represents the "Real Wage Rate."- The horizontal axis represents the "Hours of Work Supplied" (denoted as $ LS $).**Curves:**- There are two curves on the graph, each representing a different scenario of individual labor supply: - **Individual Labour Supply (1):** This is depicted by the purple curve. It is upward-sloping, indicating that as real wages increase, the individual supplies more hours of work. - **Individual Labour Supply (2):** This is denoted by the green curve and is backward-bending. Initially, it follows an upward trend similar to the first curve, but after reaching a peak, it bends backward, suggesting that beyond a certain wage level, the individual supplies fewer hours of work.**Points and Lines:**- Three vertical dashed lines correspond to different levels of hours worked: - $ L1 $ and $ L2 $ indicate hours supplied on the purple curve. - $ L3 $ indicates a peak on the green curve before it bends backward.- These lines help visualize how changes in the real wage rate impact the hours of work supplied.The graph demonstrates two labor supply models, where the first maintains a consistent trend of increasing work hours with higher wages, while the second illustrates a more complex relationship, highlighting an eventual decrease in hours worked as wages continue to rise.

option 4 is a correct answer •As wages increse over this range quntity of hours actually…

Answered: Refer to the diagram above. What is the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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	as wages increase over this range, the quantity of hours worked also increases.
	as wages increase over this range, the quantity of hours worked changes very little.
	as wages increase of this range, the quantity of hours worked is more inelastic.
	as wages increase over this range, the quantity of hours worked actually decreases.