Explain the concept of liquidated damages with an example
The legal remedy for a breach is often liquidated damages. Assume that Jones breaches a contract with Smith that would have created substantial economic value had they both performed as agreed upon. If a court determines that there was a breach, their contract may specify that Jones pay Smith a particular form of them called expectation damages. These are an amount that leaves Smith as well off as if Jones had not breached. Smith will be paid the amount she expected to gain at the time they made the contract, net of any amount she actually did receive after the breach.
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Refer to Figure 3-6. The figure above represents the market for canvas tote bags. Assume that the market price is $35. Which of the following statements is true?
A) There is a surplus that will cause the price to decrease; quantity demanded will then increase and quantity supplied will decrease until the price equals $25. B) There is a surplus that will cause the price to increase; quantity demanded will then decrease and quantity supplied will increase until the price equals $25. C) There is a surplus that will cause the price to decrease; quantity supplied will then increase and quantity demanded will decrease until the price equals $25. D) There will be a surplus that will cause the price to decrease; demand will then increase and supply will decrease until the price equals $25.
What fraction of the world's population lives on no more than $2 a day?
A. 1/10 B. 1/4 C. 1/2 D. 3/4
What is the present value of a payment of $100 to be made one year from today if the interest rate is 6 percent?
a. $105.26 b. $105.00 c. $97.24 d. $94.34
If government cuts taxes ________
A) national saving goes up B) the equilibrium interest rate would decrease C) discretionary income goes up D) all of the above E) none of the above