Suppose a market has only one seller and only one buyer of a good. The buyer has a reservation value of $25 and the seller has a reservation value of $15. The market price of the good is determined at $20
If they trade, the social surplus will be ________. A) $10
B) $20
C) $40
D) $60
A
Economics
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Indicate whether the statement is true or false
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Critics of large pay packages for CEOs argue that they:
A. Are based on a faulty calculation of piece rate B. Are an ineffective form of an efficiency wage C. Bear little relation to marginal revenue product D. Would be better if they were determined by royalty payments
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