Reservation wage

Imagine that you really like toys and you want to buy a new one. But you have to work a little bit to get some money and then buy it. However, you won't work for any amount of money because maybe you think that some toys are not worthy enough. This is your reservation wage.

A reservation wage is the lowest amount of money that someone is willing to work for. It's like a minimum amount that you need to receive in order to give your time and energy to work instead of doing something else. This amount could be different for different people and it can be influenced by various factors, like:

- Your skills and experience: If you have a degree and a lot of experience, you might ask for a higher wage because your time and effort is worth more.

- Your preferences: If you really enjoy cooking but hate cleaning, you might be willing to work for a lower wage in a restaurant if they let you cook and someone else cleans.

- The job market: If there are many people looking for the same job, employers might offer lower wages because they know people are willing to work for less. If there are only a few people qualified for a particular job, employers might offer higher wages to attract applicants.

Your reservation wage can change depending on your life circumstances and your goals. Maybe when you are a kid, you are willing to do chores for a small allowance. But as you get older, you realize that your time is worth more and you start to ask for higher pay.

In summary, a reservation wage is the minimum amount of money that someone is willing to work for, and it can be influenced by various factors such as skills, preferences, and the job market.