The town of Harmonia gives away all 500 tickets to its annual Founder's Day Free Concert-in-the-Park to local residents.Each year, more than 500 people wish to attend the concert, so some of the residents who receive the free tickets sell them for as much as $75 each.Is a transaction where someone pays a resident $75 for a "free ticket" economically efficient?

Question

Quizplus · Accepted Answer

The transaction between the resident and the buyer is voluntary, which indicates that both parties believe that they are benefiting from the exchange. The resident is able to earn some money by selling their ticket, while the buyer is able to attend the concert despite not receiving a free ticket from the town. As long as the transaction is conducted without any fraud or coercion, it is considered economically efficient since it results in a net gain for both parties involved. The fact that the buyer paid more than the face value of the ticket does not necessarily mean that the transaction is inefficient, as people's preferences and valuations differ.

The Town of Harmonia Gives Away All 500 Tickets to Its