Evaluating Consent in Contract Negotiation
A new law mandates a default 4.5-hour workday as a fallback but allows for longer hours with voluntary consent from both employer and employee. A company, facing a skilled labor shortage, presents two contract options to all new hires:
- Contract A: The legally mandated 4.5-hour workday at an hourly wage of $20.
- Contract B: An 8-hour workday at an hourly wage of $30, which also includes a one-time $1,000 signing bonus and enhanced health benefits.
The company's hiring materials strongly emphasize the superior financial and health benefits of Contract B. A new hire, after reviewing both options, chooses Contract B.
Evaluate whether the new hire's agreement to Contract B can be considered truly "voluntary" under the spirit of the new legislation. Justify your position by analyzing the incentives presented by the employer.
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CORE Econ
Ch.5 The rules of the game: Who gets what and why - The Economy 2.0 Microeconomics @ CORE Econ
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Evaluation in Bloom's Taxonomy
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