Why do the substitution effect and the income effect in labour supply?

This is the infomation I've got:



Substitution effects

As the price of a good falls, the consumer substitutes that good in place of other goods whose prices have not changed

Substitution effect of a price change arises from a change in the relative price of a good

And it always moves quantity demanded in the opposite direction to the price change

When price decreases (increases), substitution effect works to increase (decrease) quantity demanded

The Income Effect

A price cut gives consumer a gift, which is rather like an increase in income

Income effect

As price of a good decreases, the consumer檚 purchasing power increases, causing a change in quantity demanded for the good

Income effect of a price change arises from a change in purchasing power over both goods

Income effect can work to either increase or decrease the quantity of a good demanded, depending on whether the good is normal or inferior



But I don't know HOW to answer the question.

ThanksWhy do the substitution effect and the income effect in labour supply?
Labor is just another %26quot;good%26quot;. If cheaper labor becomes available, it is demanded at the expense of labor that has remained the same price.



If cheaper labor becomes available, coporation can make higher profits. This effectively gives them increased puchasing power for more labor. If the corporation decides that there are advantages to be had by using the extra purchasing power to buy the more expensive labor (perhaps there are dimishing returns from employing more of a less educated workforce) then they may opt to go for the %26quot;norma%26quot; rather than the %26quot;inferior%26quot; workforce.