Question

Which of the following statements about the labor market is correct? A. The employment contract specifies the level of work effort required from a worker. B. Paying more than is necessary to buy an employee’s time is throwing away the money. C. The buyer in the labor market is a price setter. D. The employment contract is a complete contract.

Answer 1

Answer: (A.)The employment contract specifies the level of work effort required from a worker.

(C.) The buyer in the labor market is a price setter.

Explanation:

In a economy the employment contract specifies the level of work effort required from a worker. i.e. while hiring an employee for a position in a organisation, It is required to completely specify the level of work effort required from that worker.

Also, Firms interact with individuals, employing them, discharging them and promoting or cutting wages and hours. The relationship between the forces of supply and demand influences the hours the worker works and their compensation.