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?
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.
You might also like to view...
An effective agreement to divide up the market among firms selling products that are close substitutes
A) allows each firm to earn positive net revenue even though its marginal cost is greater than its marginal revenue. B) allows each firm to earn positive net revenue by preventing cooperation from reducing each firm's marginal revenue below its marginal cost. C) tends to keep each firm's price and marginal revenue above its marginal cost. D) tends to result in both higher prices and larger output.
Though the countries can benefit by completely specializing in the production of the good in which they have comparative advantage, in real world however, they do not completely specialize
a. True b. False Indicate whether the statement is true or false