Contemporary Labor Economics 9th Edition by Campbell Mcconnell, Stanley Brue, David Macpherson, Robert Powell, David Colander

Exercise 21

What is the reservation wage "Other things being equal, one's reservation wage increases as larger amounts of nonlabor income are realized." Do you agree Explain. Redraw the indifference curves of Figure 2.8 to demonstrate that anything that lowers (raises) the value of nonmarket time will increase (reduce) the probability of labor force participation.