You just purchased a lawn mower from your next-door neighbor. How can we measure the gains from this transaction?

A. The actual benefit that you receive plus the actual benefit to your neighbor
B. The gains to your neighbor minus the amount that you paid her
C. The gains to you minus the amount that your neighbor paid for the mower
D. The gains to you cancel out the gains received by your neighbor
E. Just the benefit to your neighbor


Answer: A

Economics

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Your economics professor offers 10 points extra credit if you attend a review session before your next exam. This extra credit is an example of

A) an increase in marginal cost to attend the review session. B) a decrease in marginal benefit to attend the review session. C) a rational choice. D) an incentive to attend the review session. E) None of the above answers is correct.

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A change in autonomous consumption causes a movement along the aggregate expenditure line, while a change in consumption that depends on income causes a shift of the aggregate expenditure line

a. True b. False

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A move from H to I represents


A. an increase in quantity supplied.
B. a decrease in quantity supplied.
C. an increase in supply.
D. a decrease in supply.

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Pinnacle Finance Bank has a 12 percent reserve requirement ratio. What is Pinnacle Finance’s money multiplier?

a. 6 b. 1.2 c. 8.33 d. 12

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