 supply of labor, the income layer trade-off. So, dear students, today we will discuss the topic of labor supply. As you know from the previous module, that labor demand is determined by the firm. Actually, the demand of the output of the firm, it determines that how much labor the firm will hire. But the labor supply is determined by the individuals in the working group. Working group is the rule of Pakistan. Any person who is above 10 years of age is considered in this working age group. So, labor supply is determined by the working age group's individuals. Every individual has a total time endowment, which they divide in two parts, between work and labor. Work means that the time they utilize in the wage paying sectors. For example, a person is working for a salary, his own business, he is working for a profit, or he is helping his family business. He is helping his family in the agriculture sector. So, all these activities are considered to be working. Work is the opposite. The other activity we are denoting is the layer. The layer means that the time he utilizes other than job activities. For example, he spends time with his family, he eats, he sleeps, and the rest of the time, he spends time with his family, he works in the house, he spends time with his relatives, he does harm to his family. So, the layers are clear. So, labor supply, for example I told you, is determined by the individuals in the working age group that, the amount of labor will be supplied. So, the basic rule is the same as we discussed which we have discussed in terms of the firm, that how much labor it will demand, that which will maximize its profit. Similarly, how many individuals will work, it also depends on their utility maximization. Utility maximization basically work layer, choice, it will be determined. Utility basically depends on two things. Number one, condemnation and number two, layer. The relationship with the work of the condemnation is that the more a person works, the more his income will be determined and that income will then determine his condemnation. And the more he works, the less his layer will be. In this context we say that it is a trade-off between work and layer. He has a total of 24 hours, we know. So he has to divide the 24 hours between work and layer. If he does more work, then the layer will work. If he wants to enjoy more of the layer, then he will have less time for work. Cost benefit of working. That is how it will determine how much work he has to do. So the basic principle is that he will see what is his cost to work and what is his benefit. The cost means that the more he works, the more he will spend on wage earning activities. That is how much his layer and time will work. Because he gets utility from time, this means that the more he works, the less he will have time for work and the total utility of his work will be less. What is the benefit of working? The benefit is that he will get income. He will increase his consumption with that income and he will get utility from that consumption. So the cost of working is that the utility of his work will be less and the utility of getting from that consumption will increase. So the decision of whether he will work or not depends on whether his benefit is more or his cost is more. As long as the benefit is more than the cost, he will continue to work until that time and when they both become equal, he will stop working there. So the rule is the same that we discussed in economics. The marginal benefit should be equal to the marginal cost.