Harry and his wife are looking for a new house. However, they ...

[lindiwe]

Harry and his wife are looking for a new house. However, they cannot decide where to buy the house. Harry wants to live in Santa Cruz, while his wife wants to live in Ontario.
 
  If Harry values living in Santa Cruz at 10,000 and his wife values living in Ontario at 15,000, in which place are they likely to buy a house?

Question 2

According to the diagram in the figure above, an allocatively efficient use of resources requires that production and consumption of gasoline be
 
  A) 1 million gallons of gasoline per month.
  B) 2 million gallons of gasoline per month.
  C) 3 million gallons of gasoline per month.
  D) 4 million gallons of gasoline per month.

[Amiracle]

Answer to Question 1

Because Harry's wife values living in Ontario at 15,000 and Harry values living in Santa Cruz at 10,000, they can reach an efficient solution if Harry's wife offers an amount between 10,000 and 15,000 to convince Harry to buy a house in Ontario.

Answer to Question 2

B