Your Professor Moonlights to Make Ends Meet During the Summer

question 54

Multiple Choice

Your professor moonlights to make ends meet during the summer months and has a knack for painting houses.You agree to pay $500 over whatever the materials and equipment rental cost for the job and delight in sipping lemonade in the shade watching your poor professor perform under a(n) :

• A)Cost-plus contract.
• B)Lump-sum contract.
• C)Time and material contract.
• D)Fixed wage contract.

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Definitions:

Fixed Supply

A situation where the quantity of a good available is constant and does not change in response to price changes.

One-Of-A-Kind

Unique, without any identical counterpart.

Pure Rent

Payment to a factor of production (land, specifically) in excess of what is needed to keep it in its current use.

Fixed Supply

A situation where the quantity of a good, service, or resource is limited and cannot be changed in the short run, often leading to inelastic supply.