When a Good Is Scarce

question 59

Multiple Choice

When a good is scarce,

• A) this indicates that producers are withholding output so they can raise the price of the good.
• B) some method must be used to allocate the good among users.
• C) price is one way to ration the good.
• D) both b and c are correct.
• E) all of the above are correct.

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Definitions:

Executory Costs

Expenses associated with the ongoing execution of agreements or contracts, such as maintenance and insurance costs in leasing agreements.

Guarantee

A promise or assurance, typically in writing, that certain conditions will be fulfilled, often related to the quality, durability, or performance of a product.

Capital Lease

A capital lease is a lease agreement where the lessee receives ownership rights over the asset, for accounting purposes, similar to a purchase financed through a loan.

Economic Life

The duration over which an asset is expected to be economically usable, with its cost being justified by its performance.