Use the Following to Answer Questions

question 234

Multiple Choice

Use the following to answer questions:
Figure: Gains from Trade
-(Figure: Gains from Trade) Refer to the figure. What are the total gains from trade at the free market equilibrium?

• A) $1,000
• B) $500
• C) $0
• D) $1,500

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Definitions:

Unliquidated Debt

A debt for which the parties either dispute the fact that any money is owed or agree that some money is owed but dispute the amount.

Repayment Schedule

A detailed plan outlining the frequency, amount, and duration of payments owed by a borrower to a lender until the debt is paid off.

Promissory Estoppel

A legal principle that prevents a party from going back on a promise made when the other party has reasonably relied on that promise to their detriment.

Promisor

The person or party in a contract who has made a promise to perform or deliver something to the other party.