If the Graph Shown Is Displaying a Competitive Market and the Market

question 127

Multiple Choice

If the graph shown is displaying a competitive market and the market is currently offering a wage less than P*:

• A) there would be a shortage of workers who want to work at that wage.
• B) there would not be unemployment in the market.
• C) firms would have a hard time finding employees.
• D) All of these statements are true.

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Definitions:

Enforceable Promise

A commitment in a contract that is legally binding and can be upheld in court.

Substituted Contract

An agreement made to replace a prior contract, which was agreed upon by all original parties and extinguishes the obligations of the first agreement.

Legal Detriment

A loss or disadvantage suffered by a party who acts or refrains from acting in a legal transaction.

Pre-existing Moral Obligation

A duty that arises from moral considerations or societal expectations rather than a legal contract.