Fact Pattern 28-2B

question 26

Multiple Choice

Fact Pattern 28-2B
Rico signs a lease on behalf of Start-Up Games,Inc. ,with Tower Office Suites.As part of the lease,Rico signs a document titled "GUARANTY," which states that it is "an absolute guaranty" of the lease's performance.
-Refer to Fact Pattern 28-2B.If Start-Up stops paying the rent,it is most likely that li?ability or loss for the unpaid amount will rest with

• A)no one.
• B)Rico and Start-Up.
• C)Tower Office Suites.
• D)the other tenants on the same property.

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Definitions:

Good

A material item or service that satisfies a want or need and is available for sale or trade.

Deadweight Loss

Deadweight loss represents the efficiency lost to an economy because of market inefficiencies or interventions, where resources are not allocated optimally.

Consumer Surplus

The misalignment between the price consumers are willing to allocate for a good or service and the price they actually allocate.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual market price they receive, representing the profit producers make.