A Is Engaged as the Personal Assistant for P, a Famous

question 42

Multiple Choice

A is engaged as the personal assistant for P, a famous celebrity.A regularly hires luxury cars on behalf of P, for which P regularly pays.One weekend, without P's permission, A hires a Porsche in P's name for A's own personal use.Is P entitled to refuse to pay for the hiring of the Porsche?

• A)Yes.A was not authorised to hire the car on P's behalf.
• B)No.A had apparent authority and P is bound by A's order.
• C)No.A had the express authority of P.
• D)Yes.The supplier should have checked that A was authorised by P before hiring the car to A.

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Definitions:

Elasticity Of Supply

A measure of how much the quantity supplied of a good responds to a change in the price of that good, with higher elasticity indicating a greater response.

Bilateral Monopoly

A market structure consisting of only one buyer and one seller, mutually depending on each other.

Monopsonist's Demand

The market demand by a single buyer for a particular product or service, which can significantly influence the market price and terms.

Deadweight Loss

Deadweight loss is a loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is not achievable.