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May 19, 2006
The Supply of Labor
We derived a supply of labor curve from utility maximizing behavior by workers. Our variation on the two goods - two prices diagram had consumption and leisure as the two arguments to the worker's utility function. Finding the utility maximizing level of leisure reveals the utility maximizing supply of labor.
We concluded with a backward-bending labor supply curve and a brief discussion of the welfare problem.
Posted by bparke at May 19, 2006 10:13 PM