A Door-To-Door Computer Salesman, Franz, Recently Visited Gary Gullible in His

question 8

Multiple Choice

A door-to-door computer salesman, Franz, recently visited Gary Gullible in his house. Franz was selling a model named the Komputer, manufactured by a German computer company. Franz told Gary that the computer was made in Germany but used standard American parts. He assured Gary that the Komputer would be perfect for his kids to use to write reports and do school work. The Komputer came installed with standard software that the user could not modify. Franz told Gary there was no refund and all purchases were final. Gary bought the Komputer for $399.99. Everything was fine until the next day when Gary turned on the Komputer and opened the word processing program. The program used a German dictionary, such that the spelling and grammar checkers were useless. Is there any thing Gary can do?

• A) No, Gary gave up any rights he had when he purchased the Komputer knowing there was no refund.
• B) No, because the word processing program is presumably only one program among many, and the rest of the computer would have to be defective to allow a refund.
• C) Yes, but only if Gary can show that Franz told him that the word processing program used an English dictionary.
• D) Yes, the FTC's Cooling-off Rule requires the seller to give consumers three days to cancel the sale.

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Definitions:

Compensating Wage Differences

Differences in the wages received by workers in different jobs to compensate for the nonmonetary differences between the jobs.

Monopoly Theory

The economic theory that examines the consequences and efficiency of a single seller (a monopoly) controlling the entire market for a particular good or service.

Profit-Maximizing

The process of adjusting production and pricing to achieve the highest possible profit from business operations.

MRP Capital

The marginal revenue product of capital, which is the additional revenue generated by one more unit of capital.