BS 5 Gains from Trade--Key - 201 Gains from Trade BS 5...

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201 Gains from Trade BS 5 Gains from Trade--Key Source a. Preferences art auction b. Uniqueness c. A thin market d. Comparative advantage near a textile mill long-term purchasing agreement mutually advantageous seller p < agreed p < buyer p property rights sell alienable only private 1. Professor Curtis recently bought “Thumb Piano Woman” at an art auction . The source of her gain from trade most likely is e. Preferences f. Uniqueness g. A thin market h. Comparative advantage i. None of the above 2. Palo Alto, Inc, located in South Carolina near a textile mill , manufactures and sells fabric carriers used to transport dogs on passenger airliners. The source of its gains is most likely a. Preferences b. Uniqueness c. A thin market d. Comparative advantage e. None of the above 3. Tammy owns Amazing Fantasy Fifteen , the first comic book in which Spiderman appeared. The comic book is in near mint condition. Jayson wants to purchase the comic book. Tammy and Jayson bargain over the price and Jayson agrees to pay Tammy $42,600 for the book. If the trade is mutually advantageous and Tammy’s gain on the trade is $100, what is the seller’s minimum asking price? a. $42,700 b. $42,600 c. $42,500 d. Cannot determine with the information available e. None of the above
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201 Gains from Trade 4. Clark and Robert negotiated a price of $300 for a set of baseball cards. Privately, Robert was willing to pay as much as $350. The trade was mutually advantageous. Which of the following is true? a. Clark was willing to sell for as little as $250 b. Clark was willing to sell for an amount greater than $300 c. Clark was willing to sell for an amount less than $300 d. cannot make any inference about Clark’s minimum asking price
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This note was uploaded on 03/08/2010 for the course ACCY 201 taught by Professor Curtis during the Fall '08 term at University of Illinois at Urbana–Champaign.

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BS 5 Gains from Trade--Key - 201 Gains from Trade BS 5...

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