Gareth Recently Graduated with the Highest GPA of Any Student

question 68

True/False

Gareth recently graduated with the highest GPA of any student in Business.He has been hired by a prestigious bank in London, but that job will not start for three months.To fill the time and to make a little extra money, Gareth posted an advertisement around campus: "Top Flight Tutorials-Learn from the Best-$100 Per Hour-Minimum of Ten Sessions." Reva is a struggling student in the first year of the Business program.Desperate to improve her grades, she signed a contract with Gareth and paid $1000 for ten tutorials.That agreement, which Gareth personally drafted, expressly states: "This agreement is subject to the usual rules regarding assignments." After the first tutorial, Reva was delighted with Gareth's services.She found him extraordinarily arrogant, but also very smart.For the second tutorial, however, she was surprised when Evan, a mediocre second-year student, showed up instead of Gareth.As Evan explained, Gareth decided that he wanted to travel, rather than deliver tutorials, in the time before his bank job started.Gareth therefore assigned his role under the contract to Evan.Reva has no basis for complaint because she expressly agreed to abide by the general law of assignments.

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Definitions:

Negative Profits

Refers to a financial loss where expenses exceed revenues within a specific period.

Perfectly Competitive Industries

Industries in which many firms produce identical products, and entry and exit are easy, leading to zero economic profit in the long run.

Homogeneous Product

A product that is considered identical or equivalent by consumers, with no significant differences from other products in the market.

Free Exit

The condition in a market where firms can leave the industry without incurring high costs, facilitating competition and economic efficiency.