Theo, a Member of TGI Partnership, Withdrew from the Partnership

question 9

Essay

Theo, a member of TGI partnership, withdrew from the partnership and duly notified the other members. The firm was an at-will partnership and the parties parted amicably, posting a notice in the local newspaper of the dissolution of their firm. Cosmo, a customer who had conducted business with Theo several times, did not see the newspaper notice and was not informed of the dissolution. Later, Theo approached Cosmo concerning a transaction similar to those Cosmo had engaged in before with Theo acting on behalf of TGI. Cosmo placed an order, gave a substantial down payment to Theo, and received a receipt on TGI stationery from him. Theo thereafter absconded with the down payment, and TGI failed to honor the contract. Cosmo sued the other members of TGI partnership. Discuss their potential liability.

Calculate optimal input combinations given a production function and budget constraints.

Apply the Lagrangian technique to solve production and cost minimization problems.

Interpret production functions, such as Cobb-Douglas and understand their properties.

Understand the implications of different types of cost functions on marginal costs.

---

Definitions:

Banks

Banks are financial institutions licensed to receive deposits and provide loans, along with offering various other financial services.

Bank Panics

A situation in which a large number of bank customers withdraw their deposits simultaneously due to fears that the bank will become insolvent.

Deterrent

A factor or policy intended to discourage certain behaviors by instilling fear of the consequences.

Fractional Reserve

A banking system in which banks hold a fraction of the deposits as reserves, lending the rest to generate profit.