Marc's Lack of Incentive at His Reservation Wage
The case of Marc, a tutor with a reservation wage of €650, illustrates a key principle of motivation. If the school pays him a wage exactly equal to his reservation wage, he will have no incentive to work hard. This is because he is indifferent between being employed while exerting no effort and his next best option, which is unemployment.
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CORE Econ
Ch.6 The firm and its employees - The Economy 2.0 Microeconomics @ CORE Econ
Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
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Marc's Lack of Incentive at His Reservation Wage
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