Seth McDonald Grows Corn

question 20

Multiple Choice

Seth McDonald grows corn. In May, he decides to sell 3 contracts, about half of his expected crop, for December delivery. The contract price is $3.65 per bushel and the contract size is 5,000 bushels. Shortly before the delivery date, corn is selling in the spot (immediate delivery) market for $3.85 per bushel.

• A) Seth will simply let the contract expire and sell his corn in the spot market.
• B) Seth can protect his profit by buying an offsetting contract.
• C) Seth has an opportunity loss of $3,000 because he must deliver corn at the lower price.
• D) Seth can hold on to his corn for several months and hope that the price to rises enough to offset his loss.

Recognize the role of attribution biases in prejudice and stereotype formation.

Understand the social psychology behind ingroups and outgroups and their perceptions.

Evaluate the methods and credibility of persuasive messages and their sources.

Understand how rapid assessments based on minimal information can lead to quick inferences about individuals.

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Definitions:

Consideration

The benefit which is bargained for between the parties and is the essential reason for a party entering into a contract.

Bargained-For Exchange

A fundamental principle in contract law where both parties must exchange something of value for a contract to be considered valid and enforceable.

Genuine Assent

The agreement to enter into a contract based on a clear understanding of its terms, without any duress, fraud, or undue influence.

Undue Influence

An improper or wrongful pressure exerted on a person, resulting in the person acting against their free will or in a manner not reflective of their intent.