Eric Bought a New Snowmobile from the North Pole Manufacturing

question 22

Multiple Choice

Eric bought a new snowmobile from the North Pole Manufacturing Company. After buying the machine, Eric then modified it in order to soup it up. In February, just after a snowfall, Eric was driving the snowmobile, when it tipped over, trapping him beneath it. His leg was severely burned. Eric now wants to sue North Pole for strict liability. Eric:

• A) will likely win the suit, because of the faulty design of the snowmobile.
• B) will likely lose the suit, because the machine has been altered since its manufacture.
• C) has assumed the risk of using the snowmobile.
• D) cannot sue the manufacturer, because horizontal privity is lacking.

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Definitions:

Marginal Revenue

Marginal revenue is the additional income generated from selling one more unit of a good or service.

Own-price Elasticity

A measure of how sensitive the quantity demanded of a good is to a change in its own price, reflecting the responsiveness of demand to price changes.

Quantity Demanded

The quantity of a product that buyers are ready and capable of buying at a specific price.

Shoes

Footwear items designed to protect and provide comfort to the human foot while performing various activities.