Question

Olivia is considering working a secretary job for a small law firm. Given the opportunity costs of working the job, she will not accept a wage less than $12
per hour. Which of the following is likely to raise Olivia's reservation wage?(1 point)
Responses

Olivia learns that the job is more challenging than she initially thought.
Olivia learns that the job is more challenging than she initially thought.

Olivia learns that employees are paid bonuses at the end of every month.
Olivia learns that employees are paid bonuses at the end of every month.

Olivia has spent all of her savings and is struggling to pay rent.
Olivia has spent all of her savings and is struggling to pay rent.

Olivia takes on more debt and is struggling to make payments on time.
Olivia takes on more debt and is struggling to make payments on time.

Answer 1

"Olivia learns that the job is more challenging than she initially thought."

Reason: harder/less pleasant work makes the job less attractive, so she would require a higher wage to compensate — raising her reservation wage. The other changes (bonuses, depleted savings, more debt) make the job more attractive or increase her need for income, which would lower her reservation wage.