Question

In: Economics

Suppose that there are three beachfront parcels of land available for sale in Huntington and six...

Suppose that there are three beachfront parcels of land available for sale in Huntington and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the minimum selling price of each is $595,000. The following table states each person's willingness and ability to purchase a parcel.

Willingness and Ability to Purchase
(Dollars)
Alyssa 660,000
Brian 620,000
Crystal 570,000
Edison 540,000
Hilary 530,000
Tim 750,000

Which of these people will buy one of the three beachfront parcels? Check all that apply.

Alyssa

Brian

Crystal

Edison

Hilary

Tim

Assume that the three beachfront parcels are sold to the people that you indicated in the previous section. Suppose that a few days after the last of those beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a minimum price of $582,500. This fourth parcel be sold, because will purchase it from the seller for at leas the minimum price.

Solutions

Expert Solution

(1) Those consumers will buy a parcel whose willingness to pay is higher than price of a parcel ($595,000).

So, consumers who will purchase are:

- Alissa

- Brian

- Tim

(2) The 4th parcel will not be sold, because nobody will purchase it from seller for a price higher than their maximum willingness to pay.

(Remaining consumers after Alissa, Brian and Tim buy first 3 parcel are: Crystal, Edison, Hilary. Each of them has a willingness to pay of les than $582,500).


Related Solutions

16. How prices allocate resources Suppose that there are three beachfront parcels of land available for...
16. How prices allocate resources Suppose that there are three beachfront parcels of land available for sale in Asilomar and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the minimum selling price of each is $595,000. The following table states each person's willingness and ability to purchase a parcel. Person Willingness and Ability to Purchase (Dollars) Alex 750,000 Becky 660,000 Clancy 620,000 Eileen 570,000 Hubert 540,000 Kate 530,000 Which...
Assume that the three beachfront parcels are sold to the peoplethat you indicated in the...
16. How prices allocate resources Suppose that there are three beachfront parcels of land available for sale in Huntington and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the minimum selling price of each is $575,000. The following table states each person's willingness and ability to purchase a parcel.            Willingness and Ability to Purchase                      (Dollars)   Alyssa ...
Which of these people will buy one of the three beachfront parcels? Check all that apply....
16. How prices allocate resources Suppose that there are three beachfront parcels of land available for sale in Astoria and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the minimum selling price of each is $575,000. The following table states each person's willingness and ability to purchase a parcel. Which of these people will buy one of the three beachfront parcels? Check all that apply. Antonio Caroline Dmitri Frances Shen Valerie Assume that the three beachfront parcels are...
Ricardian Corn Theory of Rent Assume that there are parcels of land with three levels of...
Ricardian Corn Theory of Rent Assume that there are parcels of land with three levels of fertility. There are 300 acres of quality 1 land that produces 200 bushels of corn per acre with one dose of labor-capital. There are 200 acres of quality 2 land that produces 150 bushels of corn per acres with one dose of labor capital. There are 100 acres of land of quality 3, which produces 100 bushels of corn per acre with one dose...
3. An agronomist is trying a variety of fertilizer treatments on different parcels of land. The...
3. An agronomist is trying a variety of fertilizer treatments on different parcels of land. The goal is to see how sod yield changes and whether or not there is a difference across fertilizers. The numbers below are sod yields in square yards.                                                             Fertilizer Treatment                                     Qtr Dose Wkly          Half Dose (2 wks)    Full Dose (4 wks) Parcel A                                 77                                83                                80 Parcel B                                 79                                91                                82 Parcel C                                 87                                94                                86 Parcel D                                 85                                88                                85 Parcel E                                ...
Homes for Sale The dataset HomesForSale has data on houses available for sale in three Mid-Atlantic...
Homes for Sale The dataset HomesForSale has data on houses available for sale in three Mid-Atlantic states (NY, NJ, and PA). Table 1 shows the mean and standard deviation from the three Mid-Atlantic states, in thousands of dollars. Use this table, the knowledge that within the US the average house sells for about 265 thousand dollars1, and a 5% significance level to answer the following questions. State n Mean Std. Dev. New York 30 565.6 697.6 New Jersey 30 388.5...
Inventory by three methods: The units of an item available for sale during the year are...
Inventory by three methods: The units of an item available for sale during the year are as follows: Jan 1.        Inventory             21 units at 1,800 May 15       Purchase            28 units at 1,950 August 7     Purchase            10 units at 2,040 Nov. 20        Purchase           17 units at 2,100 There are 20 units of the item in the physical inventory at December 31. ROUND YOUR INTERMEDIATE CALCULATIONS AND FINAL ANSWER TO THE NEAREST DOLLAR 1. Using First in First Out Method calculate cost...
An investor is analyzing two parcels of vacant land to determine which is a better investment...
An investor is analyzing two parcels of vacant land to determine which is a better investment to purchase and hold for future appreciation in value: The following are the analysis assumptions for the two parcels.                                             Parcel A                Parcel B Purchase price                 100,000                    150,000 Carrying cost per year     1,500                          2,200 Projected sale price         180,000                     300,000 Anticipated Holding period 5 years                    7 years What is the projected IRR for each of the parcels? Using this information from the previous question, what...
Periodic Inventory by Three Methods The units of an item available for sale during the year...
Periodic Inventory by Three Methods The units of an item available for sale during the year were as follows: Jan. 1   Inventory 1,050 units @ $138 Feb. 17   Purchase 1,445 units @ $139 Jul. 21   Purchase 1,615 units @ $141 Nov. 23   Purchase 1,150 units @ $141 There are 1,225 units of the item in the physical inventory at December 31. The periodic inventory system is used. Do not round intermediate calculation and round final answer to nearest whole value.
Periodic Inventory by Three Methods The units of an item available for sale during the year...
Periodic Inventory by Three Methods The units of an item available for sale during the year were as follows: Jan. 1   Inventory 6 units @ $50 Feb. 17   Purchase 14 units @ $52 Jul. 21   Purchase 13 units @ $53 Nov. 23   Purchase 10 units @ $54 There are 4 units of the item in the physical inventory at December 31. The periodic inventory system is used. Round average unit cost to one decimal and final answers to the nearest...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT