Author Question: The economic value which can be created by a transaction between two people, Ed (seller) and Luis ... (Read 43 times)

fbq8i

  • Hero Member
  • *****
  • Posts: 527
The economic value which can be created by a transaction between two people, Ed (seller) and Luis (buyer), is 50 as Ed's opportunity cost of selling is 135 and Luis' valuation of the good is 185 . Suppose Ed and Luis do not speak the same language and Ed hires an interpreter who charges 2 per hour. Ed and Luis finally agree to a price of 160 . This implies:
 a. Luis' valuation of the good will increase.
  b. Ed's opportunity cost will decline.
  c. economic value from the transaction will decline.
  d. Ed will receive to a lower benefit than Luis.

Question 2

As the output produced by a firm increases, the average fixed cost:
 a. continues to decline.
  b. initially increases, and then declines.
  c. quickly drops to zero.
  d. becomes constant.
  e. declines and finally becomes negative.



bpool94

  • Sr. Member
  • ****
  • Posts: 354
Answer to Question 1

D

Answer to Question 2

a



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Tobacco depletes the body of vitamins A, C, and E, which can result in any of the following: dry hair, dry skin, dry eyes, poor growth, night blindness, abscesses, insomnia, fatigue, reproductive system problems, sinusitis, pneumonia, frequent respiratory problems, skin disorders, weight loss, rickets, osteomalacia, nervousness, muscle spasms, leg cramps, extremity numbness, bone malformations, decayed teeth, difficulty in walking, irritability, restlessness, profuse sweating, increased uric acid (gout), joint damage, damaged red blood cells, destruction of nerves, infertility, miscarriage, and many types of cancer.

Did you know?

Individuals are never “cured” of addictions. Instead, they learn how to manage their disease to lead healthy, balanced lives.

Did you know?

Human stomach acid is strong enough to dissolve small pieces of metal such as razor blades or staples.

Did you know?

Today, nearly 8 out of 10 pregnant women living with HIV (about 1.1 million), receive antiretrovirals.

Did you know?

Walt Disney helped combat malaria by making an animated film in 1943 called The Winged Scourge. This short film starred the seven dwarfs and taught children that mosquitos transmit malaria, which is a very bad disease. It advocated the killing of mosquitos to stop the disease.

For a complete list of videos, visit our video library