Labour Supply
The suppliers of the labor market are households. A household can be thought of as the summation of all the individuals within the household. Each household offers an amount of labour services to the market. The supply of labour can be thought of as the summation of the labour services offered by all the households. The amount of service that each household offers depends on the consumption requirements of the household, and the individuals relative preference for consumption verses free time.
Some notation:
Let U be total utility Let YD be commodity demand (consumption) Let LS be labor supply (hours worked) Let D(LS) be disutility from working, an increasing convex function with respect to LS.Read more about this topic: Classical General Equilibrium Model
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