When the wage rate increases from $10 to $20 per hour,the worker's budget line shifts from PQ to RQ. In response,the worker moves from A to B while decreasing work hours from 8 to 4.The reduction in hours worked arises because the income effect outweighs the substitution effect. In this case,the supply of labor curve is backward bending. When the wage rate increases from $10 to $20 per hour, the worker‘s budget line shifts from PQ to RQ. In response, the worker moves from A to B while decreasing work hours from 8 to 4. The reduction in hours worked arises because the income effect outweighs the substitution effect. In this case, the supply of labor curve is backward bending