Suppose That Due to an Increase in the Price of Steel

question 54

Multiple Choice

Suppose that due to an increase in the price of steel, Chrysler had to raise prices on its automobiles, and as a result its sales declined. Due to the decline in sales, Chrysler chose to lay off some employees rather than cut employee wages because of an unspoken agreement between its employees and Chrysler executives that wages would not be reduced. This example is consistent with the

• A) relative-wage explanation of unemployment.
• B) implicit contract explanation of unemployment.
• C) explicit contract explanation of unemployment.
• D) efficiency wage explanation of unemployment.

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Definitions:

Corporate Owner

An entity that legally owns a corporation, which can be individuals, groups of people, or other companies.

Common Areas

Parts of a property that are available for use by all residents or members of a community, such as lobbies, gardens, and swimming pools in a condominium.

Tenants in Common

Tenants in common is a form of co-ownership where each owner possesses a specific fraction of the property and has the right to will their share to their heirs.

Partitioned

Divided into parts or sections, often used in the context of dividing property among owners or heirs.