Describe the trade-off involved in a rule

Assignment Help Econometrics

Reference no: EM131227382

Consider a piece of property that is jointly owned by two individuals, each with one half share. Suppose that, in order to sell, owner 1 requires $3,000 for his half share, but owner 2 requires $6,000 for her half share. A buyer arrives and offers $10,000 for the entire property.

(a) If the two owners can bargain with each other costlessly, do you expect a sale to occur (assuming both owners have to give their consent)?

(b) Suppose instead that the two owners cannot bargain with each other (for example, they are a divorcing couple). If each is entitled to one half of the proceeds, do you expect a sale to occur in this case?

(c) Describe the trade-off involved in a rule that allows either one of the parties to "force" a sale of jointly owned property when they cannot come to an agreement.

Reference no: EM131227382

Questions Cloud

Contrast and compare the supply chains : QSO 690 Topics in Operations Management - Contrast and compare the supply chains required for the private label eBags and those drop-shipped directly from the manufacturers. Answer in the context of the case. General answers are not expected.

Perform an analysis of sales data for the vintage restaurant : Perform an analysis of the sales data for the Vintage Restaurant. Prepare a report for Karen that summarizes your findings, forecasts, and recommendations.

What are the various types of cybercrime that exist : What types of legislation has been enacted in the United States to assist with information security and what policies have resulted? What is communication security? What is computer security? How are communication and computer security related? Wha..

Billion and the marginal prospensity to consume : Suppose the government increases expenditures by $30 billion and the marginal prospensity to consume is 0.50. By how will equilibrium GDP change?

Describe the trade-off involved in a rule : Consider a piece of property that is jointly owned by two individuals, each with one half share. Suppose that, in order to sell, owner 1 requires $3,000 for his half share, but owner 2 requires $6,000 for her half share. A buyer arrives and offers..

Government for a reduction inconsumption taxes : Why might producers in some sectors be more likely to ask the government for a reduction inconsumption taxes, relative to producers in other sectors? What characterizes a sector thatis more likely to ask for such favour.

How the duration of a bond would be affected : Determine how the duration of a bond would be affected if the coupons were extended over additional time periods.

How the bond elasticity would be affected : Determine how the bond elasticity would be affected if the bond price changed by a larger amount, holding the change in the required rate of return constant.

Effect of increasing the litigation rate : A procedural means of lowering the cost of litigation is to "bifurcate" (separate) the issues of liability and damages into separate trials. This allows society to save the cost of a trial in cases where the defendant wins. Suggest why this may ha..

User Account

All Pages