You and your sister share a room. Your sister prefers sleeping with all windows closed, while you prefer sleeping with at least one window open to let in some fresh air
Since neither of you are willing to give up your own preferences, you end up fighting every night. Is there a possible solution to this problem if you value keeping your windows open at night for $100, while your sister values keeping the windows closed at night for $80?
Because you value keeping the windows open at $100 while your sister values keeping windows closed at $80, an efficient solution is possible if you decide to pay her an amount between $80 and $100 as a compensation for keeping the windows open. The exact amount that you'll have to pay her will depend on your respective bargaining powers.
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If the market interest rate increases, then
a. the cost of borrowing increases and so saving falls b. the opportunity cost of consuming a good in the future increases and saving, therefore, increases c. the opportunity cost of consuming a good in the future increases and saving, therefore, falls d. the reward for saving diminishes and so present consumption increases e. the reward for saving increases and so saving increases
Suppose the president of a college argues that a 25 percent tuition increase will raise revenues for the college. It can be concluded that the president thinks that demand to attend this college is:
a. elastic. b. inelastic, but not perfectly inelastic. c. unitary elastic. d. perfectly elastic.
The marginal cost is an important piece of information for firms and economists to know because it
a. determines the size of the plant you should build b. is the only cost that increases as production increases c. helps determine precisely which production level maximizes profit d. incorporates fixed costs into the production decision e. is a measure of labor productivity
Which of the following examples shows an expanding market?
a. The quantity of wool produced remains steady. b. Several firms enter the corn market, while many firms exit. c. The amount of resources invested in the organic egg market decreases. d. The equilibrium price for cell phones decreases.