Homework Answers
1) Highest price (buyer) x (1 + 8%) = 525000
Highest price = 486111
2) a - larger than the total surplus (parties would not be able to share tax burden and would not gain anything from the transaction)
3) d - All are advantages of capitalism (voluntary transactions, self regulation and self interest)
4) a - Minimum wages (while rent control is a price ceiling)
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