Lori Went into an Electronics Store That Had a Sign

question 14

Multiple Choice

Lori went into an electronics store that had a sign posted on the wall declaring "All sales final!" She told the salesperson that she was looking for an iPod with Pandora, so that she could listen to streaming music while working out in her wifi-enabled health club. The salesperson selected a wifi-capable iPod and told Lori that she could receive Pandora as long as the fitness center had wifi. The next day, when Lori tried to use the iPod at the fitness center with wifi, she found that she could only hear static. Which of the following is true of this situation?

• A) Lori will be unable to return the iPod because the store's policy said "All sales final!" at the time of the purchase.
• B) Lori may not be able to claim a refund, since the iPod will be declared as merchantable.
• C) Lori can claim a refund of the iPod on the basis of an implied warranty of fitness for a particular purpose created by the salesperson.
• D) Lori can claim a refund from the store based on a limited warranty that is practiced in the electronics industry.

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Definitions:

Contract Curve

In economics, it is a curve that shows the set of mutually beneficial (efficient) allocations in a trade or exchange situation.

Edgeworth Box

A diagram used in microeconomics to show the distribution of resources and the optimal allocation between two individuals.

Pareto Optimal Allocations

Economic situations where no individual can be made better off without making another individual worse off.

Edgeworth Box

A diagram used in microeconomics to show the distribution of resources or outcomes between two parties, illustrating concepts like efficiency and market equilibria.