A. Under the consideration of efficient contracts model, the wage and employment arrangement is done where one individual is made better off without making the other worse off. The unions as well as the firms will be better off while bargaining over wage rate and employment providing sufficient value for both.
B. If we assume that a union’s utility only depend on the wage rate and not the level of employment, then under the efficient contracts model the union will try to take the highest possible price to gain the highest possible utility.