Which of the Following Is an Example of a Valid

question 12

Multiple Choice

Which of the following is an example of a valid contract according to common law?

• A) Bob offers to sell either of his bikes, red or blue, to Sam the coming Monday for $1,000, to which Sam agrees. On Saturday Bob goes to race dirt bikes on his red bike; due to a minor collision, the red bike's brakes stop working. On Monday, however, he offers the blue bike to Sam, who was out of town for the weekend.
• B) Bob offers to sell either of his bikes, red or blue, to Sam the coming Monday, to which Sam agrees. On Monday, Bob sells his blue bike to Sam and asks for $1,500 in return.
• C) Bob offers to sell either of his bikes, red or blue, to Sam the coming Monday, to which Sam agrees to pay $1,000 or $1,200 for the blue bike. On Monday, Bob asks Sam to pay $1,200 for his red bike.
• D) Bob offers to sell either of his bikes, red or blue, for $1.000 to Sam the coming Monday, to which Sam agrees. Bob also asks Sam, as part of the deal, not to buy a bike during the weekend. Sam goes out of town for the weekend and buys a bike for $700. Bob asks Sam to pay him $1,000 for his bike on Monday.
• E) Bob offers to sell either of his bikes, red or blue, to Sam for $1,000 the first Monday of the month, to which Sam agrees. On the second Monday of the month, Sam asks Bob to sell both his bikes for $1,000.

Understand the impact of market conditions on a firm's decision to adjust output rather than price in a competitive price-taker market.

Understand the concept of a price-taker firm in competitive markets.

Analyze situations to determine optimal output levels for price-taker firms.

Identify conditions under which a firm should continue, reduce, or cease production in the short run.