Karen Has Agreed to Buy Sara's Car, but the Two

question 63

Multiple Choice

Karen has agreed to buy Sara's car, but the two have not agreed on the price. When there is no agreement as to price in a contract for a sale of goods, what effect does it have on the contract?

• A) The price is whatever the seller decides.
• B) The price is a reasonable price at the time of making the contract.
• C) The price is a reasonable price at the time of delivery.
• D) There is no contract, because the agreement is not definite and certain enough.

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Definitions:

Expected Utility

A theory in economics that models how agents choose among risky alternatives to maximize their satisfaction.

Income

Receipts garnered on a habitual basis as a result of engaging in work or investment.

Von Neumann-Morgenstern

A theory of expected utility which provides axioms for how rational individuals make decisions under uncertainty.

Utility Function

A mathematical representation of how different bundles of goods or services are valued by an individual or entity for satisfaction or utility.