When the possibility for strongly efficient contracts occurs, what will happen?
A. Isoprofit lines must be horizontal.
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 are parabolas that open upward.
E. The union and firm negotiate over the employment level but not over the wage.
Answer: B
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The stricter the enforcement of a price ceiling, the
A) smaller is the difference between the black market price and the legal market price of the good. B) larger is the difference between the black market price and the legal market price of the good. C) greater is the amount of the good available in total, from either the legal market or the black market. D) Both answers B and C are correct.
Assume Brad worked as a contractor for a year and had revenues of $120,000 and explicit cost of $70,000 . If he could have been paid $80,000 working for a computer company, his accounting profit as a contractor was ____ and his economic profit was ____
a. $50,000 . -$30,000 b. $10,000 . $50,000 c. $40,000 . $50,000 d. $50,000 . $40,000