Jun Is Building a Home for Tessa That Is to Be

question 18

Essay

Jun is building a home for Tessa that is to be completed by December 31st. Jun tells Tessa that he needs to hire additional workers in order to have the home done by that time and that she needs to pay him an extra $10,000. Tessa agrees to pay. Jun finishes the home and asks for his $10,000. Tessa refuses to pay. If Jun sues, what is the likely result? Discuss whether you believe the result is ethical and equitable.

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Definitions:

Income Elasticities

Refers to the sensitivity of the demand for a good to changes in the income of the consumers who buy this good.

Normal Goods

Products that see an increase in demand when consumer income grows, and experience a drop in demand as consumer income declines.

Wheat Yields

The quantity of wheat produced per unit of land area.

Total Revenues

The total amount of money generated by a firm from its sales activities before any costs or expenses are subtracted.