Olivia's reservation wage is the minimum wage she is willing to accept to take a job, and it can be influenced by changes in her financial situation, job expectations, and needs.
Here's how each option can impact her reservation wage:
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Olivia learns that the job is more challenging than she initially thought. - This may increase her perception of the job's value, potentially raising her reservation wage because she may feel that a more challenging job should pay more.
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Olivia takes on more debt and is struggling to make payments on time. - This typically raises her financial pressure, potentially leading her to lower her reservation wage in order to secure a job to meet her financial obligations.
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Olivia learns that employees are paid bonuses at the end of every month. - The knowledge of bonuses might positively influence her perception of the job's overall compensation, but it doesn't necessarily raise her reservation wage; it might encourage her to accept a lower base wage because of the potential for bonuses.
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Olivia has spent all of her savings and is struggling to pay rent. - Similar to taking on more debt, this situation puts financial pressure on her, leading her to potentially accept a lower wage to ensure she can pay her bills.
Given these considerations, the most likely option to raise Olivia's reservation wage is:
Olivia learns that the job is more challenging than she initially thought.
This scenario would lead her to believe that she should be compensated more for the additional difficulty and responsibility associated with the job.
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