Don,who Owed Dan $1,000 for His Share of the Cost

question 15

Multiple Choice

Don,who owed Dan $1,000 for his share of the cost of a fishing trip they took together 2 years ago,transferred to Dan a check for $700 that he had just received from a customer.Has Dan given value for holder in due course purposes?

• A) Yes,because accepting an instrument in payment of a prior debt is considered to be value given for holder in due course purposes.
• B) Yes,but only if Dan still intends to collect the remaining $300 from Don.
• C) No,because the check was less than the amount of the debt.
• D) No,because the check was from a business transaction and the debt was personal.
• E) No,because Don had a preexisting duty to pay Dan the $1,000.

---

Definitions:

Violates WARP

Refers to a situation where an individual's choice behavior contradicts the Weak Axiom of Revealed Preferences, suggesting inconsistency in their preferences.

Bundle

A combination of goods or services that are sold or consumed together.

Revealed Preferred

Another term for revealed preference, emphasizing the process of deducing preferences by observing actual choices under constraints.

Violates WARP

Deviating from the Weak Axiom of Revealed Preference, indicating inconsistencies in consumer choice under the assumption of rational behavior.