Back to Assignment Attempts Aver. Understanding the backward-bending labour supply curve Eric has the following labour supply curve: WAGE RATE (Dollars per hour) LABOUR (Hours) Labour Supply W 3 W 2 W 1 The substitution effect of a higher wage outweighs the income effect when wages are . The substitution effect is the phenomenon that workers choose to work hours when they are given a raise, because .age no score out oPlotting the supply of labour In Denver, 150 people are willing to work an hour as host staff if the wage is $15 per hour. For each additional $5 that the wage rises above $15, an additional 50 people are willing to work an hour. For wages of $15, $20, $25, $30, and $35 per hour, plot the daily labour supply curve for host staff on the following graph. Supply 0 50 100 150 200 250 300 350 400 450 500 50 45 40 35 30 25 20 15 10 5 0 WAGE RATE (Dollars per hour) QUANTITY OF LABOUR (Number of workers) What is one explanation for why this labour supply curve is upward sloping? Firms are willing to hire fewer host staff at a higher wage