Sue Fishes for Cod at a Cost of $2 Per

question 12

Multiple Choice

Sue fishes for cod at a cost of $2 per ton, while Dave fishes at a cost of $4 per ton. Both have one 1,000-ton ITQ and the current market price is $5 per ton. If Dave offered to sell his ITQ to Sue for $2,000, he and Sue would

• A) make the sale because they're both better off.
• B) not make the sale, because Sue is better off and Dave is not.
• C) not make the sale, because Dave is better of and Sue is not.
• D) not make the sale, because neither is better off.

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Definitions:

Second Law

Also known as the second law of thermodynamics, it states that the total entropy of an isolated system can never decrease over time, and is central to the direction of heat transfer and the efficiency of heat engines.

Entropy

A measure of the disorder or randomness in a system, often associated with the second law of thermodynamics.

Disorder

A disruption to regular bodily structure and function, leading to disease or ailment.

Heat

A form of energy transfer between two substances or systems due to a temperature difference.