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

question 113

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 advertises his jersey in the local newspaper and sells it to the local buyer with the highest reservation price,his economic surplus will be

• A) $240.
• B) $490.
• C) $500.
• D) $740.
• E) $750.

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Definitions:

Block Grants

Financial assistance provided by the federal government to state or local governments for broad purposes, with relatively few restrictions on how the funds may be spent.

Categorical Grants

Funding from the federal government to state or local governments for specific purposes and subject to detailed conditions.

New Federalism

A political philosophy of devolution, or the transfer of certain powers from the United States federal government back to the states, initiated in the 1970s.

Unfunded Mandates

Legal requirements or conditions for federal programs that are imposed by Congress on state and local governments without providing federal funding to cover the costs.