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A Price Ceiling Usually Results in a Surplus and a Misallocation

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True/False

A price ceiling usually results in a surplus and a misallocation of resources.


Definitions:

Operating Lease

A contractual arrangement giving the lessee temporary use of the property, with continued ownership of the property by the lessor.

Capital Lease

A capital lease is a lease agreement that transfers substantially all the risks and benefits of ownership from the lessor to the lessee.

Bargain Purchase Option

A provision in a lease agreement that allows the lessee to purchase the leased asset at a price significantly below its fair market value.

Economic Life

The estimated period over which an asset is expected to be useful in generating revenue or its intended purpose.

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