Question

16. How prices allocate resources 

Suppose that there are three beachfront parcels of land available for sale in Astoria and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the minimum selling price of each is $575,000. The following table states each person's willingness and ability to purchase a parcel. 

Which of these people will buy one of the three beachfront parcels? Check all that apply. 

• Antonio 

• Caroline 

• Dmitri 

• Frances 

• Shen 

• Valerie 

Assume that the three beachfront parcels are sold to the people that you indicated in the previous section. Suppose that a few days after the last of those beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a minimum price of $535,000. This fourth parcel be sold, because will purchase it from the seller for at least the minimum price. 

Answer 1

People's whose willingness to pay is greater than $575000 will purchase the parcel.

People who will buy - Antonio, Shen and Valeria

Parcel WILL be sold because CAROLINE will purchase it.