ECON 2110 Ch.2 hw questions and answers 2025 A+
Grade
Mark values his drum set at $800, and Ella values her guitar at $1,000. Suppose that Mark trades his
drum set for Ella's guitar.
- correct answer Mark must value Ella's guitar for at least $800, and Ella must value Mark's drum set for
at least $1,000.
Each of 100 people receives a random item from a grocery store and assigns it a value between 1 (low)
and 10 (high). They trade those items among themselves for items they prefer rather than those they
randomly received and then assign a second value (again, 1 to 10) to the item that they end up with
after the trading concludes. How would the sum of those values before trading compare with the sum
after trading?
- correct answer After trading, value would be higher because preferences are diverse.
Trade makes people better off when:
- correct answer people have different preferences.
Jose sells his economics textbook from last semester, which he could sell back to the bookstore for $40,
to Adolfo for $150. Adolfo had planned to pay $240 for the textbook at the bookstore. Which of the
following statements is TRUE?
- correct answer Both Jose and Adolfo are made better off by the trade.
Matilda sells her iPhone, which she considers worthless, to Gabriel for $200. Which of the following
statements is TRUE?
- correct answer This trade created value because Gabriel is buying the iPhone for more than Matilda
thinks it is worth.
Only a very small portion of people who use microwaves know how they work. This is an example of:
- correct answer the division of knowledge.
Division of knowledge refers to:
- correct answer people learning different tasks in which they specialize.
Grade
Mark values his drum set at $800, and Ella values her guitar at $1,000. Suppose that Mark trades his
drum set for Ella's guitar.
- correct answer Mark must value Ella's guitar for at least $800, and Ella must value Mark's drum set for
at least $1,000.
Each of 100 people receives a random item from a grocery store and assigns it a value between 1 (low)
and 10 (high). They trade those items among themselves for items they prefer rather than those they
randomly received and then assign a second value (again, 1 to 10) to the item that they end up with
after the trading concludes. How would the sum of those values before trading compare with the sum
after trading?
- correct answer After trading, value would be higher because preferences are diverse.
Trade makes people better off when:
- correct answer people have different preferences.
Jose sells his economics textbook from last semester, which he could sell back to the bookstore for $40,
to Adolfo for $150. Adolfo had planned to pay $240 for the textbook at the bookstore. Which of the
following statements is TRUE?
- correct answer Both Jose and Adolfo are made better off by the trade.
Matilda sells her iPhone, which she considers worthless, to Gabriel for $200. Which of the following
statements is TRUE?
- correct answer This trade created value because Gabriel is buying the iPhone for more than Matilda
thinks it is worth.
Only a very small portion of people who use microwaves know how they work. This is an example of:
- correct answer the division of knowledge.
Division of knowledge refers to:
- correct answer people learning different tasks in which they specialize.
