How is economic value created during transactions between buyers and sellers?
Buyer and seller both benefit from exchanging some good if the seller gets more than his opportunity cost (i.e., the value of the best forgone alternative), and the buyer pays less than her valuation (maximum willingness to pay for it before going elsewhere). Sellers can improve economic value by lowering the cost of production, improving the quality of the product, and reducing the transaction costs.
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The London gold fixing is an example of a(n)
A) dealer market. B) Walrasian auction market. C) brokered market. D) secondary market.
When an economy operates efficiently,
A. the MRPs of every input into the production of a good are equal. B. marginal utility equals marginal cost for every good. C. the price of a good equals the sum of the marginal physical products of its inputs. D. All of the responses are correct.