What constitutes a market transaction in the context of the employment relationship?

Question

Quizplus · Accepted Answer

A market transaction in the context of the employment relationship refers to an agreement between the seller of labour (employee) and the purchaser of labour (employer), with a focus on determining the price (salary or wage) and conditions (benefits, working hours, etc.) of the employment relationship. Option A is incorrect because it refers to an agreement between two employees, which is not a market transaction. Option B is also incorrect because it suggests that the employment relationship is based on an expectation instead of being explicitly agreed upon. Option D is incorrect because it refers to an agreement between two separate businesses, which is not the case in the employment relationship where the employer is purchasing the labour of the employee.

What Constitutes a Market Transaction in the Context of the Employment