Why might the labor supply curve be backward bending? Show graphically considering the income and substitution effect with increasing wages. Why might the possibility of a backward bending labor supply curve influence the effectiveness of a tax change? In answering this question evaluate the following expression where T is the tax revenue, τ is the tax rate, H are hours worked, w is the wage rate and is the after tax wage. why is w square? dT/dt= wH(w) - Tw^2dt/dw