NS¹

NS²

Real wage, w

Labor, N

Wealth increase
         or
Expected future
real wage increases

An increase in wealth

Wage

L*

L*'

The effect on labor supply
of an increase in wealth

A = Intersect(xAxis, yAxis)
B = (7, 0)
C = Point(yAxis)
a = Segment(A, B)
b = Segment(A, C)
f = If(1.5 ≤ x ≤ 4, (x - 1)^(1.5))
g = If(2.5 ≤ x ≤ 5, f(x - 1))
D: (3, f(3))
E: (4, g(4))
u = Vector(E, D)
F: (4, f(4))
G: (5, g(5))
t = true
w = 2 (slider from 2 to 4, step 0.4)
H: (0, w)
I: (5, w)
c = Segment(H, I)
J = Intersect(f, c, (2.587401051909423, 1.999999999888919))
K = Intersect(g, c, (3.587401051909423, 1.999999999888919))
L: (x(J), 0)
M: (x(K), 0)
d = Segment(J, L)
e = Segment(K, M)