Question: 1. Explain why the economic theory of contracts would enforce a firm offer to sell a Chevrolet and the promise of a gift to Old Siwash University.
2. Explain why the numbers in Figure indicate that the second player is liable for expectation damages in the event of breach.
3. In Figure, both parties desire enforceability of the second player's promise when the promise is made, but when the time comes to perform, the promisor may not want enforceability. What do these facts say about the Pareto efficiency of enforcing the second player's promise? promise is made, which can be called ex ante Pareto efficiency, and the Pareto efficiency of actually enforcing the promise when the time comes to perform, which can be called ex post Pareto efficiency.)
