For the next set of multiple choice questions, consider a construction contract between a builder and a client, where V = $20,000 R = $1,000 P = $15,000 V = the client's value of performance; R = the client's reliance investment; and P = the contract price, payable on performance. Suppose that at the time the contact was made, the cost of performance to the builder is uncertain, but it was known that it will definitely take one of the following values: C=($10,000; $14,000; $18,000; $22,000). 23. It is efficient for the builder to breach this contract if it turns out that (a) C=$10,000 (b) C=$14,000 (c) C=$18,000 (d) C=$22,000. 24. Calculate the amount of expectation damages for this example. It is equal to:
For the next set of multiple choice questions, consider a construction contract between a builder and a client, where V = $20,000 R = $1,000 P = $15,000 V = the client's value of performance; R = the client's reliance investment; and P = the contract price, payable on performance. Suppose that at the time the contact was made, the cost of performance to the builder is uncertain, but it was known that it will definitely take one of the following values: C=($10,000; $14,000; $18,000; $22,000). 23. It is efficient for the builder to breach this contract if it turns out that (a) C=$10,000 (b) C=$14,000 (c) C=$18,000 (d) C=$22,000. 24. Calculate the amount of expectation damages for this example. It is equal to:
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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