Which economic law is applied for this transaction

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Mike and Abdul go to Walt Whitman High School. Mike has 20 comic books and no game, while Abdul has no comic book and 10 games. Mike is boring of reading comic books, and Abdul is boring of playing games. In school, Mike and Abdul reach agreement that they trade some of their stuffs each other. 6 comic books of Mike are traded for 3 games of Abdul. They are now much happier than before, because they both read and play.

Question: Write down 2-3 pages of essay that includes the answers for the following contents.

1) Which economic law is applied for this transaction (trade)?

2) What is the new commodity bundle for Mike and Abdul after trade?

3) What is the opportunity cost for Mike to obtain 3 games measured by Mike's comic books?

4) Do you think Mike's old (before transaction) and new (after transaction) commodity bundle are on the same indifference curve? Say yes or no and explain why by drawing the graph (by putting games in the Y-axis and comic books in the X-axis).

Reference no: EM131476253

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