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 $575,000. The following table states each person's willingness and ability to purchase a parcel.

Person

Willingness and Ability to Purchase

(Dollars)

Bob520,000Cho510,000Musashi750,000Rina660,000Sean600,000Yvette550,000

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

Bob

Cho

Musashi

Rina

Sean

Yvette

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 $535,000. This fourth parcel be sold, because will purchase it from the seller for at least the minimum price.