A Plot of Land Was Purchased for $120,000 Which Had

question 32

Multiple Choice

A plot of land was purchased for $120,000 which had $10,000 of past due property taxes on it. Non-refundable taxes on the purchase were $1,400 and the title search cost $500. The capitalized cost of the land was

• A) $120,000.
• B) $121,900.
• C) $130,000.
• D) $131,900.

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Definitions:

Market Equilibrium

A market state where the quantity demanded equals the quantity supplied, leading to no pressure on the price to either rise or fall.

Good

A material item or service that satisfies a want or need and is available for sale or trade.

Deadweight Loss

Deadweight loss represents the efficiency lost to an economy because of market inefficiencies or interventions, where resources are not allocated optimally.

Consumer Surplus

The misalignment between the price consumers are willing to allocate for a good or service and the price they actually allocate.