Alice Is Browsing in a Commercial Art Gallery When She

question 7

Multiple Choice

Alice is browsing in a commercial art gallery when she sees a painting that she likes. Arthur, who is the manager of the gallery, tells her that in his opinion the painting is a genuine Leroy Neiman work. Based upon that representation, Alice buys the work for $5,000. She later discovers that the painting is only a cheap copy of the original that is worth no more than $50. Arthur has:

• A) breached an express warranty to Alice that the painting is a Neiman work.
• B) breached the warranty of merchantability.
• C) not breached a warranty because he was merely expressing his opinion.
• D) breached an express warranty, the warranty of merchantability, and the warranty of fitness for a particular purpose.

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Definitions:

Money-Supply Curve

A graphical representation showing the relationship between the quantity of money in an economy and its price or interest rate.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan amount.

Equilibrium

A situation in which the market price has reached the level at which quantity supplied equals quantity demanded.

Money Demanded

The total amount of money that households and businesses want to hold at a given time, often influenced by interest rates, income levels, and the economic outlook.