1. The number of hours that workers offer may reduce when the pay rate increases from $5.00 per hour to $8.50 per hour because the worker feels that working fewer hours does not affect her income.
For example, if a worker works 8 hours per day at $5.00 per hour and the pay rate increases to $8.50 per hour, the worker may like to work for only 5 hours ($40/$8.50) with the new rate, provided they are satisfied with receiving a daily income of $40.
Thus, when the pay rate increases from $5.00 per hour to $8.50, the worker may choose to reduce the number of hours worked per day.
2. The number of hours that workers offer may reduce when the pay rate increases from $5.00 per hour to $10.00 per hour because the worker feels that working fewer hours does not reduce her earned income.
For example, if a worker works normally 8 hours per day at $5.00 and the pay rate increases to $10.00 per hour, the worker may choose to work for only 4 hours instead.
Thus, when the pay rate increases from $5.00 per hour to $10.00, the worker who is satisfied with a daily income of $40 may choose to reduce the number of hours worked per day.
3. With an increased pay rate of $13.50, the worker may further reduce the hours offered for work from 8 hours to 3 hours daily.
Thus, we can conclude that for some workers who are indifferent to higher income, increasing pay rates discourage them from offering more hours.
Learn more about pay rates and labor hours at https://brainly.com/question/15800524
