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Dave is contracting with Jesus to buy a custom desk for his office. Dave's value of the custom desk is $1200. At the time of

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Dave is contracting with Jesus to buy a custom desk for his office. Dave's value of the custom desk is $1200. At the time of contracting, Jesus doesn't know what the exact cost of building the desk will be, but expects it to have the following distribution: Cost Probability 300 25% 700 25% 1100 25% 1500 25% Dave and Jesus sign a contract where Dave will pay Jesus $1000, paid in advance, and Jesus will deliver him the desk the following month. During that month, Jesus learns what the cost of the desk will be (and can then either breach the contract or perform as promised). Question 4 2 pts What are the expected social gains from the contract when reliance damages are used? (You will need to use the answer from the previous question to compute this). Round your final answer to the nearest 100th as needed. D Question 5 2 pts Suppose the courts require specific performance in the case of breach. This means that Jesus would be required to complete the desk regardless of the realized costs. What is the expected social gains from the contract in this case? D Question 6 2 pts Now suppose the courts award perfect expectation damages. In the case that Jesus breaches the contract, what will be the amount of perfect expectation damages? Recall that Dave has paid Jesus in advance - this will matter in your calculation in computing the total (perfect expectation) damage payment

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