A competitive equilibrium is described by

Sumo wrestling tournaments typically have 66 wrestlers. Each wrestles 15 matches. A wrestler who has a winning record (eight wins or more) is guaranteed to rise in the official rankings; a wrestler with a losing record falls in the rankings

Suppose the last match of a tournament is between Wrestler A, who has won eight matches so far and Wrestler B, who has won seven. If moral hazard is a serious problem in sumo wrestling, who do you think is more likely to win this match?

If a firm buys a delivery van for $18,000 and can resell it in 2 years for $7,500, the sunk cost is

A) $10,500. B) $7,500. C) $18,000. D) $0.