In Practice, the "Freedom of Contract" Principle Meant That __________________

question 52

Multiple Choice

In practice, the "freedom of contract" principle meant that __________________.

• A) employers increased workers' wages as the cost of living increased
• B) employers could set pay as low as workers would accept
• C) wages automatically increased as profits increased
• D) employers recognized the right of workers to bargain collectively

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Definitions:

Initial Endowment

The initial quantity of goods, services, and assets that an individual, organization, or economy possesses.

Pareto Optimal

An allocation of resources from which it is impossible to reallocate without making at least one individual worse off.

Utility Function

A mathematical representation that captures the level of satisfaction or happiness that consumers derive from consuming goods and services.

Initial Endowment

The original distribution of resources, wealth, or abilities that individuals or groups possess in an economic model.