Susan is deciding whether to work over the summer or to pursue a three-month backpacking expedition in the Sierras. She would choose to work only if she can find a job that pays at least $20 per hour, which would be her _____ wage.

Question

Quizplus · Accepted Answer

The reservation wage is the lowest wage at which a worker would be willing to accept a particular type of job. In Susan's case, $20 per hour is the minimum she would accept to work instead of going on her backpacking trip, making it her reservation wage.

Susan Is Deciding Whether to Work Over the Summer or to Pursue