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Macroeconomics 5th Edition by Olivier Blanchard
Edition 5ISBN: 978-0132159869Macroeconomics 5th Edition by Olivier Blanchard
Edition 5ISBN: 978-0132159869 Exercise 8
Reservation wages
In the mid-1980s, a famous supermodel once said that she would not get out of bed for less than $10,000 (presumably per day).
a. What is your own reservation wage
b. Did your first job pay more than your reservation wage at the time
c. Relative to your reservation wage at the time you accept each job, which job pays more: your first one or the one you expect to have in 10 years
d. Explain your answers to parts (a) through (c) in terms of the efficiency wage theory
In the mid-1980s, a famous supermodel once said that she would not get out of bed for less than $10,000 (presumably per day).
a. What is your own reservation wage
b. Did your first job pay more than your reservation wage at the time
c. Relative to your reservation wage at the time you accept each job, which job pays more: your first one or the one you expect to have in 10 years
d. Explain your answers to parts (a) through (c) in terms of the efficiency wage theory
Explanation
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(a) Your reservation wage is the wage th...
Macroeconomics 5th Edition by Olivier Blanchard
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