What is unemployment compensation? What will be an ideal ...

[MGLQZ]

What is unemployment compensation?
 
  What will be an ideal response?

Question 2

Imagine you are a buyer in a double oral auction with a reservation value of 10 and there is a seller asking 8 .
 
  a. How much will you gain from accepting this offer?
  b. If you are the only buyer, and you know that the lowest ask price is 2, should you accept this offer?

[macagnavarro]

Answer to Question 1

Unemployment compensation is a state government transfer program that pays cash benefits for a certain period of time to laid-off workers who have worked for a specified period of time for a covered employer.

Answer to Question 2

a. By accepting this offer, you will gain 2 (10  8).
b. Yes. By accepting this offer, you will gain 8 (10  2). If you choose to accept an offer from a different seller, your surplus will be lower. By accepting the lowest ask price of 2, you will maximize your surplus from this trade.

[MGLQZ]

TYSM

[kusterl]

Gracias!