If an prospective employee is not offered her reservation utility or reservation wage, then she will:
A) tend to look for another job or withdraw from the labor market.
B) seek a larger benefit package.
C) use the job as the basis for a career, assuming that wages will increase beyond the marginal revenue product over time.
D) accept the job because a wage below the reservation utility is very attractive.

Question

Quizplus · Accepted Answer

The reservation utility or reservation wage is the minimum salary or benefit package that an individual is willing to accept for a job. If a prospective employee is not offered her reservation utility, she will be dissatisfied and tend to look for another job or withdraw from the labor market.

If an Prospective Employee Is Not Offered Her Reservation Utility