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Suppose Florida Issues an Alligator Hunting Permit to Jackson, Who

Question 57

Multiple Choice

Suppose Florida issues an alligator hunting permit to Jackson, who values an alligator hunt at $2,500, instead of Oliver, who values an alligator hunt at $4,000, and alligator hunting permits are allowed to be bought and sold in a secondary market. If Jackson and Oliver agree on a price for Jackson to transfer the permit to Oliver, society would capture ________ cooperative surplus.


A) an additional $1,500 of
B) no additional
C) an additional $6,500 of
D) The additional cooperative surplus captured by society would depend on the negotiated price of the permit.

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