An Advantage of Leasing Is That the Lessor Does Not

question 20

Multiple Choice

An advantage of leasing is that the lessor does not own the asset and can cancel:

• A)only financial leases.
• B)only operating leases.
• C)only capital leases.
• D)any kind of leases anytime.
• E)None of the above.

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Definitions:

Deadweight Loss

A loss in economic efficiency that occurs when the equilibrium outcome is not achievable or is not achieved.

Elastic

A characteristic of a good or service that indicates its sensitivity to changes in price, with relatively large changes in quantity demanded or supplied in response to price changes.

Inelastic

Inelastic describes a situation where the demand or supply for a good or service is not significantly changed by variations in price.

Consumer Surplus

The difference between the maximum price a consumer is willing to pay for a good or service and the actual price they do pay.