Negotiations Between Dave and Mary Resulted in the Following Agreement

question 52

Multiple Choice

Negotiations between Dave and Mary resulted in the following agreement: Dave would sell his property to Mary for the sum of $150,000, closing date to be August 10, 2011. When the two completed their discussion, Mary paid Dave $5,000 as part payment of the purchase price and received a receipt. The contract was not in writing. On August 10, Mary tendered the remainder of the money, but Dave refused to convey the property. Mary sued Dave for breach of contract. On these facts which of the following is true? (Assume all facts can be proved.)

• A) Mary cannot enforce the agreement because all of the consideration was not paid.
• B) Mary cannot enforce the agreement because she had not paid Dave all of the money.
• C) Mary can enforce this contract if the receipt specified the part payment was for the property in question.
• D) Mary cannot enforce this contract because the contract was not in writing.
• E) Mary cannot enforce this contract because the contract was not evidenced in writing.

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Definitions:

Income Effect

The change in an individual's consumption choices that results from a change in their real income or purchasing power.

Substitution Effect

The substitution effect occurs when consumers replace cheaper items for more expensive goods due to changes in relative prices, holding utility constant.

Slutsky Compensated Demand Curve

Represents consumer demand by adjusting for changes in purchasing power, illustrating how quantity demanded varies with price, holding utility constant.

Ordinary Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded, with all other factors being held constant.