Let D = Demand,S = Supply,P = Equilibrium Price,Q =

question 115

Multiple Choice

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for solar panels if the government offers tax breaks to encourage manufacturers to produce more solar panels?

• A)D increases,S no change,P and Q increase.
• B)S increases,D no change,P decreases,Q increases.
• C)D and S increase,P and Q decrease.
• D)D no change,S increases,P decreases,Q decreases.

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Definitions:

Fair Market Value

Fair Market Value is the estimated price at which an asset would change hands between a willing buyer and seller, neither being under compulsion to buy or sell and both having reasonable knowledge of the relevant facts.

Book Value

The value of an asset according to its balance sheet account balance, calculated by subtracting accumulated depreciation from the asset's original cost.

Boot

Additional cash or property included in a transaction to even out a trade or exchange of dissimilar assets.

Depreciated

Refers to the reduction in the value of an asset over time due to wear and tear or obsolescence.