When the Possibility for Strongly Efficient Contracts Occurs, What Will

question 30

Multiple Choice

When the possibility for strongly efficient contracts occurs, what will happen?

• A) The union and firm negotiate over the employment level but not over the wage.
• B) The union and firm negotiate over the wage level but not over the employment level.
• C) The labor demand curve must be vertical.
• D) Isoprofit lines must be horizontal.
• E) Isoprofit lines are parabolas that open upward.

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Definitions:

Rescind

To rescind is to revoke, cancel, or repeal a contract, agreement, or law, effectively making it as if it never existed.

Agreement

A mutual understanding or arrangement between two or more parties that outlines the terms and conditions of a specific course of action.

Fraud

Intentional deception made for personal gain or to damage another individual.

Voidable Contract

A voidable contract is a legal agreement that may be annulled or declared invalid by one of the parties due to certain defects, while remaining valid until such action is taken.