The Economic Value Which Can Be Created by a Transaction

question 19

Multiple Choice

The economic value which can be created by a transaction between two people, Ed (seller) and Luis (buyer) , is $50 as Ed's opportunity cost of selling is $135 and Luis' valuation of the good is $185.If each gains $25 from this transaction, which of the following conclusions can be drawn?

• A)Transaction costs are zero.
• B)Luis has higher bargaining power than Ed.
• C)Ed has higher bargaining power than Luis.
• D)Transaction costs are positive.

Recognize biases in perception and decision-making.

Understand the different stages of the innovation process.

Describe Amabile's components of creativity and their interrelations.

Recognize challenges in keeping up with innovations and the consequences.

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