When Myrtle Comes Home from Work One Evening,she Finds That

question 35

Multiple Choice

When Myrtle comes home from work one evening,she finds that her yard has been mowed and trimmed.Later,a man comes to collect for the yard work done.Myrtle refuses to pay for the work since she has never seen the man before and did not hire him to do her yard work.Which of the following answers is most accurate?

• A)This is an implied,unilateral contract and she must pay the price requested by the man.
• B)This is an express,voidable contract that either party may avoid.
• C)The court would order Myrtle to pay the reasonable value of the yard work because of the benefit conferred on her.
• D)Myrtle would not have to pay for the yard work.

Calculate changes in consumer surplus due to shifts in price.

Identify the effects of market equilibrium changes on consumer and producer surplus.

Understand and analyze the relationship between supply, demand, and total surplus.

Interpret the impact of demand and supply shifts on total surplus.

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Definitions:

Net Present Value

A method used in capital budgeting to analyze the profitability of an investment by calculating the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Present Value

The present value of a future amount of money or a series of cash flows, discounted by a certain rate of return.

Net Present Value Rule

A principle that states an investment should be made if the net present value of its cash flows, discounted at the hurdle rate, is positive.

Invest

The act of allocating resources, usually money, with the expectation of generating an income or profit.