India is a rapidly growing country, with surging labor productivity, but vast ru

Question

India is a rapidly growing country, with surging labor productivity, but vast rural areas remain among the poorest on the planet and may still have larger populations than the more affluent urban areas. People from the countryside, especially from minority tribes, move to the vibrant cities, earn what they felt they need and return to the countryside, returning more quickly the more they earn per hour. Describe the behavior of labor markets that employ such people. If you can describe(do not draw) a graph of what happens.

Explanation / Answer

This is a downward sloping supply curve. Typically, we think of a supply curve as being backward-bending. This means that the top portion is downwards sloping while the bottom portion is upward sloping. Since the people work less the more they get paid, then they must be in this upper portion of the labor supply curve.

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