________, in economics, refers to a preference for equal outcomes ...

[Capo]

________, in economics, refers to a preference for equal outcomes within the target population.
 
  A) Randomness
  B) Rationalism
  C) Fairness
  D) Liberalism

Question 2

Define reservation values. If a buyer of a product has a reservation value of 10, the seller of the product has a reservation value of 3, and the equilibrium price of the product is determined at 5,
 
  calculate the consumer surplus and the producer surplus.

[poopface]

Answer to Question 1

C

Answer to Question 2

A reservation value is the price at which a trading partner is indifferent between making the trade and not doing so. For a buyer, this is the highest price he is willing to pay for a good or service. For a seller, it is the lowest price he is willing to accept for a good or service.
Consumer surplus = 10 - 5 = 5
Producer surplus = 5 - 3 = 2

[Capo]

Correct answers!

[poopface]

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