The Labor Market Quick Check

Question

3 of 53 of 5 Items
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 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.

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

Answer 1

The factor that is likely to raise Olivia's reservation wage is:

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

This is because a more challenging job typically requires higher skills or effort, which could lead Olivia to expect a higher wage as compensation for the increased demands of the job. In contrast, the other factors mentioned (bonuses, struggling to pay rent, and taking on more debt) may not necessarily increase her minimum acceptable wage but could lead her to accept a lower wage than her initial reservation wage if her urgency to find a job increases.