What is the difference between willingness to accept and willingness to pay? For a trade to take place, does the willingness to accept have to be lower, higher, or equal to the willingness to pay?
What will be an ideal response?
Willingness to accept is the lowest price that a seller is willing to receive to sell an extra unit of a good, while willingness to pay is the highest price that a buyer is willing to pay for an extra unit of a good. For a trade to take place, the buyer's willingness to pay must be greater than or equal to the seller's willingness to accept.
You might also like to view...
Which of the following would most likely reduce the birthrate?
(a) public health improvements (b) an increase in child mortality (c) a decline in the availability of secondary education (d) a reduction in the opportunity cost of a woman's time (e) all of the above.
Exchange is necessary in an economy if: a. output is to be produced
b. output is to be consumed. c. individuals are self-sufficient. d. families are self-sufficient. e. labor is specialized.