Multiple-Choice Questions1. 1.Troy, a minor, sells his collection of sports memorabilia to Vern for $250. On his eighteenth birthday. Troy learns thatthe collection may have been worth at least $2,500. Troy1. can disaffirm, because the contract has not been fully performed.2. can disaffirm, if he does so within a reasonable time after attaining majority.3. cannot disaffirm, because he has already attained majority.4. cannot disaffirm, because the contract has been fully performed.2.2.Doug has been drinking heavily. Joe offers to buy Doug's farm for a fair price. Believing the deal is a joke, Dougwrites and signs an agreement to sell and gives it to Joe. Joe believes the deal is serious. The contract is1. enforceable, if the circumstances indicate that Doug understands what he did.2. enforceable, because Joe believes that the transaction is serious.3. unenforceable, because the intoxication permits Doug to avoid the contract.4. unenforceable, because Doug thinks it is a joke.3. 3.Ed is adjudged mentally incompetent. Irwin is appointed to act as Ed's guardian. Irwin signs a contract to sell someof Ed's property to pay for Ed's care. On regaining competency, Ed1. can disaffirm, because he was mentally incompetent.2. can disaffirm, because he is no longer mentally incompetent.3. cannot disaffirm, because Irwin could enter into contracts on his behalf.4. cannot disaffirm, because he may become mentally incompetent again.4.4.Adam, a sixteen-year-old minor, enters into a contract for necessaries, which his parents could provide but do not.Adam disaffirms the contract. Adam's parents1. must pay the reasonable value of the goods.2. must pay more than the reasonable value of the goods.3. can pay less than the reasonable value of the goods.4. do not have to pay anything for the goods.5.5.First Bank loans money to Patty, a sixteen-year-old minor. Patty must repay the loan1. if the loan is made for the express purpose of buying necessaries.2. if First Bank makes sure the money is spent on necessaries.3. if both a and b are true.4. in none of the above circumstances.6. 6.Eve, a fifteen-year-old minor, buys a smartphone app from EZ Spyware. The contract is fully executed. Eve nowwants to disaffirm it. In most states, Eve7.7.1. must return only the app to EZ.2. must return the smartphone with the app to EZ.3. must return just the smartphone to EZ.4. need do none of the above.Neal is adjudged mentally incompetent, and a guardian is appointed. Neal later signs an investment contract withMary. This contract is1. valid.2. bidable.3. void.4. none of the above.8.8.Jeff, a fifteen-year-old minor, contracts with Online, Inc., for Internet access services. Considering that Jeff is a minor,which of the following is true?1. Online can disaffirm the contract.2. Jeff can disaffirm the contract.3. Both a and b are true.4. None of the above are true.

1. 1. Troy, a minor, sells his collection of sports memorabilia to Vern for $250. On his eighteenth birthday, Troy learns that the collection may have been worth at least $2,500. Troy 1. can disaffirm, because the contract has not been fully performed. 2. can disaffirm, if he does so within a reasonable time after attaining majority. 3. cannot disaffirm, because he has already attained majority. 4. cannot disaffirm, because the contract has been fully performed. 2.2.

1. 1. Troy, a minor, sells his collection of sports memorabilia to Vern for $250. On his eighteenth birthday, Troy learns that the collection may have been worth at least $2,500. Troy 1. can disaffirm, because the contract has not been fully performed. 2. can disaffirm, if he does so within a reasonable time after attaining majority. 3. cannot disaffirm, because he has already attained majority. 4. cannot disaffirm, because the contract has been fully performed. 2.2.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter20: The Problem Of Adverse Selection Moral Hazard

Section: Chapter Questions

Problem 3MC

See similar textbooks