Mike Responds to Flavio's Statement That He Would Like to Buy

question 13

Multiple Choice

Mike responds to Flavio's statement that he would like to buy Mike's motorbike for $3,000 by saying that he would want $4,000,given the work he has put into it.Flavio says OK.I'll give you that.Here's $2,000,and I'll give a promissory note for the balance payable at $500 a month for the next 4 months."
1) There is a contract.
2) There is no contract.
3) Flavio's first statement to Mike was an invitation to do business.
4) Mike's response was a counter offer.
5) Flavio's final statement to Mike was an acceptance.

• A)1 and 3.
• B)1,3 and 4.
• C)1,3,4 and 5.
• D)2.
• E)2 and 4.

---

Definitions:

Classical Theory of Employment

An economic theory that posits that the economy naturally operates at a level of full employment due to the flexibility of prices and wages.

Total Consumption

The aggregate amount of goods and services consumed by individuals and entities in an economy.

Total Saving

The aggregate saving in an economy, comprising both private saving by households and public saving by the government.

Aggregate Supply Curve

A graphical representation showing the relationship between the total production of goods and services at various price levels in an economy.