Suppose your economics professor has an extra copy of textbook that he or she would like to give to a student in the class. Which of the following schemes is the most likely to result in an efficient outcome?
A)Randomly selecting one student to receive the textbook.
B)Auctioning off the textbook to the highest bidder.
C)Letting students take turns using the textbook.
D)Giving the textbook to the student who has the lowest midterm score.

Question

Quizplus · Accepted Answer

The most efficient way to distribute the textbook is to give it to the student who values it the most highly, which is exactly what would happen if the textbook were auctioned off to the highest bidder.

Suppose Your Economics Professor Has an Extra Copy of Textbook