The economic value which can be created by a transaction between two people, Ed (seller) and Luis (buyer), is $50 as Ed's opportunity cost of selling is $135 and Luis' valuation of the good is $185 . Suppose Ed and Luis do not speak the same language and Ed hires an interpreter who charges $2 per hour. Ed and Luis finally agree to a price of $160 . This implies:

a. Luis' valuation of the good will increase.
b. Ed's opportunity cost will decline.
c. economic value from the transaction will decline.
d. Ed will receive to a lower benefit than Luis.


D

Economics

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Answer the following statement true (T) or false (F)

Economics

Which of the following conclusions is not supported by the Three-Sector-Model?

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Economics

When aggregate demand shifts rightward along the short-run aggregate-supply curve, inflation

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Economics

A nation has a comparative advantage over a trading partner in the production of good A if it

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Economics