EBK MICROECONOMICS
2nd Edition
ISBN: 9780134458496
Author: List
Publisher: VST
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Question
Chapter 10, Problem 4P
(a)
To determine
Social surplus regardless of the
(b)
To determine
Effect of fees on the agreement and total surplus.
(c)
To determine
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Ivan has inherited his grandmother’s 1963 Chevrolet Corvette (trust me this is a hot car to own – if you watched Lucifer on TV you know it), which he values at $45,000. He decides that he might be willing to sell it so he posts it on Craigslist for $55,000. Samantha is interested and willing to pay up to $72,000. Would Ivan and Samantha want to voluntarily engage in trade? How much economic surplus is created for both of them as a result of this exchange? Show your calculations. What is the total economic surplus? Explain how you arrived at this number.
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