Tim Has Just Inherited a Signed Wayne Gretzky Hockey Jersey,which

question 133

Multiple Choice

Tim has just inherited a signed Wayne Gretzky hockey jersey,which he would like to sell.His reservation price for the jersey is $500,and he can either place an ad in the local newspaper for $10 or sell the jersey on eBay,which will charge him 5% of the selling price.The local buyer with the highest reservation price is willing to pay $750 at most,while the two eBay bidders with the highest reservation prices are willing to pay $1,200 and $1,000,respectively.(Note that,in an eBay auction,the bidder with the highest reservation price wins,and the price paid is the reservation price of the second-highest bidder. )
-Refer to the information above.If Tim sells his jersey on eBay,then total economic surplus will be ________ higher than if he had sold it through advertising in the local newspaper.

• A) $450
• B) $410
• C) $260
• D) $250
• E) $200

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Definitions:

Rhizome

A horizontal underground stem that bears leaves and buds and often serves as a storage organ and a means of asexual reproduction (e.g., iris).

Horizontal

Refers to something that is arranged or lying flat, parallel to the plane of the horizon or perpendicular to the vertical.

Aboveground

Referring to the part of a plant or structure that is visible or exists above the surface of the soil or ground.

Endosperm

The nutritive tissue inside the seeds of most flowering plants, surrounding and nourishing the embryo.