There will be gains from trade when:
A. Both buyer and seller attach the same value to the product
B. A buyer values a product less highly than the seller
C. A buyer values a product more highly than the seller
D. Money is used as a medium of exchange
C. A buyer values a product more highly than the seller
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Assume that you own an exhaustible resource that is sold competitively. The price of the resource is:
Pt + 1 - C = 1.08(Pt - C), where t = 0 at the beginning of 2005, P = price in dollars per ton, and C = marginal cost of extraction (fixed over time). It is also known that the demand for the resource is: Q = 1,000,000 - 25,000 P, where Q represents output in tons per year. If the beginning of 2005 price is $30 per ton and the marginal cost of extraction is $10 per ton, what will the price be at the end of 2009? What is the user cost of production in 2009? Is it different from the user cost for 2005? Explain. How much of the resource will be extracted in 2009? What is the market rate of interest on money? Explain.
Which of the following is not correct?
a. Across countries there are large differences in the average income per person. These differences are reflected in large differences in the quality of life. b. With a growth rate of about 2 percent per year, average income per person doubles about every 60 years. c. The ranking of countries by average income changes substantially over time. d. In some countries real income per person has changed very little over many years.
A curve that shows the cost to the firm of hiring an additional unit of a resource is known as a
a. marginal product curve b. marginal revenue product curve c. total revenue product curve d. marginal revenue curve e. marginal resource cost curve
The textbook says that which of the following is among the key forces shaping today's economy?
A. Technological change B. Labor unions C. Changing consumer confidence D. Government regulations