Assume a Price Floor Is Imposed in the Wheat Market

question 117

Multiple Choice

Assume a price floor is imposed in the wheat market at the equilibrium price, and that a price ceiling is imposed in the gasoline market at the equilibrium price. What will an increase in supply in both the wheat and gasoline markets create?

• A) A surplus in the wheat market and an increase the quantity of gasoline traded.
• B) A surplus in the wheat market and a shortage in the gasoline market.
• C) Shortages in both the wheat and gasoline markets.
• D) Surpluses in both the wheat and gasoline markets.

Differentiate between direct materials and conversion costs in process costing.

Calculate the total number of units to be assigned costs on the cost of production report.

Understand the role of beginning and ending inventory in process costing.

Interpret production data to calculate equivalent units for direct materials and conversion costs.

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Definitions:

Nash Model

A concept in game theory where each participant's strategy is optimal given the strategies of all other participants, leading to a situation of equilibrium.

Nash Equilibrium

A concept within game theory where no player can benefit by changing strategies while the other players keep theirs unchanged.

Bertrand Model

An economic model of competition among firms that compete by setting prices simultaneously.

Payoff Matrix

A table that shows the payoffs for each player in a game for every possible combination of actions by the players.