University a Sets Tuition at the Equilibrium Level Based on Price

question 21

Multiple Choice

University A sets tuition at the equilibrium level based on price and then imposes entrance requirements in the form of minimum high school GPA and SAT scores.Enrollment at this school will likely be

• A) at the equilibrium level.
• B) below the equilibrium level because of the use of non-price rationing devices.
• C) above the equilibrium level because of the combination of price and the use of non-price rationing devices.
• D) none of the above

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Definitions:

Standard Costing System

An accounting system that uses predetermined costs for products or services to assess the efficiency of operations by comparing them to actual costs incurred.

Standard Quantity Allowed

The quantity of materials or resources authorized for use in the production of a certain level of output under standard operating conditions.

Finished Goods Inventory

The stock of completed products that are ready to be sold but have not yet been sold to customers.

Standard Costing System

A method of cost accounting that involves assigning expected costs to production and then analyzing any variances between those expected costs and actual costs incurred.