​The Following Graph Shows the Labor Market

question 122

Multiple Choice

​The following graph shows the labor market. The vertical axis measures wage in dollars, and the horizontal axis measures labor in hours. The economic rent in equilibrium is represented by the area _____. ​
Figure 11.1

• A)a
• B)b
• C)c
• D)a + b
• E)b + c

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Definitions:

Judgment

A decision of the court.

Conditions Precedent

Contractual stipulations that must be met before a contract becomes effective or before an obligation must be fulfilled.

Frustrated Contract

A contract that, through no fault of either party, is rendered incapable of being performed due to an unforeseen event, leading to the contract being void and freeing all parties from their obligations.

Torrential Rains

Intense, heavy rainfall in a short period of time, often leading to flooding.