Suppose a buyer hires an interpreter who charges $5 to negotiate a deal with a seller. The buyer's valuation of the good is $50 and the seller's opportunity cost is $35 . If the net benefit to the buyer is equal to the same received by the seller, what is the price agreed upon by the two parties?
a. $42
b. $40
c. $44
d. $38
B
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In which of the following cartels is total cartel profit likely to be the highest?
A) a cartel made up of firms of various sizes each producing the same quantity of a differentiated product B) a cartel made up of identical firms each producing the same quantity of a homogeneous product C) a cartel made up of equal sized firms each producing different quantities of a differentiated product D) a cartel made up of firms of various sizes each producing different quantities of a homogeneous product
If Treasury deposits at the Fed are predicted to increase, the manager of the trading desk at the New York Fed bank will likely conduct ________ open market operations to ________ reserves
A) defensive; inject B) defensive; drain C) dynamic; inject D) dynamic; drain
An economic variable that measures something at a particular point in time is called a _____
a. stock variable b. periodic variable c. dummy variable d. flow variable e. constant variable
A deadweight loss is the loss to society of not producing the supply-and-demand determined level of output
Indicate whether the statement is true or false