The Reservation Wage

question 24

Multiple Choice

The reservation wage

• A)is the wage at which an unemployed worker is just indifferent to accepting a job and turning it down.
• B)is the wage paid to the reserve army of the unemployed.
• C)should be the same as the employment insurance benefit, if employment insurance is to be efficient.
• D)is the wage paid in the government sector.
• E)cannot be higher than the employment insurance benefit.

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Definitions:

Liabilities

Financial obligations or debts owed by a business to external organizations or individuals.

Accrued Revenues

Assets (receivables) created when revenues are earned, but cash will be collected from customers in the future; created at end of period during the adjustment process to reflect the amount of revenue earned by providing goods or services over time to customers who will pay in the future.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the owners' claim on the company assets.

Assets

Resources owned by a company from which future economic benefits are expected to flow to the company.