Fay, Age 17, Ordered a Pair of Skis on the Installment

question 2

Multiple Choice

Fay, age 17, ordered a pair of skis on the installment plan. She paid $20 every month until she turned 18, the age of majority. The next day, she sold the skis to Sharon and disaffirmed the contract. Fay is:

• A) still liable since she had to disaffirm before her 18th birthday.
• B) still liable because selling the skis amounted to a ratification.
• C) still liable because she used the skis.
• D) not liable because skis are not necessaries.

Analyze the implications of fairness and envy in allocation decisions.

Explain Arrow’s impossibility theorem and its implications for social decision-making.

Understand the influence of external preferences on utility and allocation decisions.

Examine the role of a social welfare function in assessing the well-being of a community.

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Definitions:

Maximize

To increase or make as large or great as possible, typically used in the context of optimizing outcomes or efficiencies in economics and business.

Monopolistically Competitive Industry

A market structure characterized by many firms selling products that are similar but not identical, leading to competitive pricing and product differentiation.

Restaurants

Establishments where meals are prepared and served to customers.

Fast Food Chains

A series of restaurants serving quick, easily prepared, and served food items, often through standardized menus and methods across multiple locations.