Cavell Is Selling His CD Burner to an Acquaintance

question 26

True/False

Cavell is selling his CD burner to an acquaintance.Cavell knows that the CD burner has a defect, generating CDs that skip.The acquaintance asks Cavell for his opinion of the machine just before the purchase is to take place.All Cavell says is "I personally like it, but I am not too picky about quality.You should try the machine out before you buy it." Cavell has made a misrepresentation about the quality of the machine.

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Definitions:

Efficient

Describes a process that achieves its goals with the least waste of time and effort.

Lump-Sum Tax

A tax that is the same amount for every person.

Deadweight Loss

A cost to society created by market inefficiency, which occurs when supply and demand are out of equilibrium.

Ability-To-Pay Principle

A principle in taxation that holds that taxes should be levied according to an individual's or entity's capacity to pay.