The Supply of Labor

When we speak of a labor market, we are referring to the market for a specific occupation in a specific geographical area. Consider the supply for nurses in the hypothetical city of Florence. The supply question is” How many hours of nursing services will be supplied at each wage?” To answer that question, we must think about how many nurses are in the city and how many hours each nurse works. The decision to work is a decision to sacrifice some leisure time for money: Each hour of work reduces leisure time by one hour.