A Worker's Reservation Wage Is

question 20

Multiple Choice

A worker's reservation wage is

• A) the minimum wage a worker must receive to join the labor force.
• B) the maximum wage a worker must receive to stay in the labor force.
• C) the minimum wage a worker must receive to decide to receive public assistance.
• D) the maximum wage a worker must receive to decide to receive public assistance.
• E) the wage at which a worker will switch from part time to full time employment.

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision.

Playing Golf

An outdoor game in which players use clubs to hit a small ball into a series of holes on a course in as few strokes as possible.

Sunny Days

Days characterized by sunshine, with minimal to no cloud cover, often associated with good weather.

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen.