Jones Entered into a Contract to Purchase a 1957 Edsel

question 132

Multiple Choice

Jones entered into a contract to purchase a 1957 Edsel automobile from Smith for $2000. Unknown to Smith, Jones had an opportunity to resell that car for $5000 to Brown, who wanted to use it as a prop in a movie being shot in town. Before the car was delivered and payment made, it was destroyed by fire when one of Smith's employees carelessly spilled a can of gasoline in the garage where the car was kept. If the court found that the normal market value for such a vehicle was only $3000, which of the following statements is correct with respect to the appropriate remedy that should be awarded by the court for such a breach of contract?

• A) Because of the uniqueness of the vehicle, the court should award specific performance.
• B) In these circumstances, the court should award $5000, representing the lost profits.
• C) In these circumstances, there should be no remedy since the contract has been frustrated.
• D) The court should award only $1000, the difference between the market price and the purchase price.
• E) The court could award $3000.

Understand the implications of monopolistic control over both production and distribution on market outcomes.

Develop skills to analyze and solve complex problems in economics related to monopolies.

Understand how monopolies can influence consumer prices through their market strategies.

Understand the principle of how monopsony and monopoly affect market prices and quantities.

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Definitions:

Social Learning Theory

A theory that suggests people can learn new behaviors and information through observing others, emphasizing the importance of modeling, imitation, and social reinforcement.

Imitation and Modeling

The act of mimicking the behavior, gestures, or speech of others as a method of learning, often a key process in the development of social skills and behaviors.

Aversion and Terror Management

Theories that explore human behavior and cognition relating to avoiding fear, death, and existential terror, often via clinging onto cultural beliefs or self-esteem enhancing activities.

Negative Reinforcement

A behavior modification technique that involves the removal of an unfavorable condition to increase the likelihood of a desired response.