Consequential Damages

question 1

Multiple Choice

Consequential damages:

• A) occur when the special circumstances of the plaintiff cause him or her to suffer losses that would not ordinarily be foreseeable as a result of the breach.
• B) are recoverable unless the defendant had reason to foresee them at the time the contract was created.
• C) are measured by the loss in value of the promised performance.
• D) are very small damages that the court may award the plaintiff when a technical breach of contract has occurred without causing any actual loss.

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Definitions:

Optimal Labor Employment

The ideal quantity of labor that a firm employs where the marginal cost of hiring an additional worker equals the marginal revenue product.

Power Drills

Electric tools designed for drilling holes or driving fasteners into various materials.

Marginal Product

Marginal product is the additional output that is produced by using one more unit of a particular input, keeping all other inputs constant.

Optimal Labor Employment

The most efficient level of labor usage where the additional cost of employing one more worker equals the additional revenue generated.