Jim has an old (working) television that he would like to get rid of now that he has purchased a new high-definition, flat-screen television. The old television is no longer worth anything to him now that he has his new flat-screen TV. Veronica on the other hand has an even older television that has just broken down. She would pay up to $50 for any working TV. If Jim trades Veronica his old television for $50, both are better off but total value in society does not increase.

Question

Quizplus · Accepted Answer

By trading his old television for $50, Jim gains a benefit while Veronica's need is satisfied. This creates a new value for society as Veronica is now able to use the old television and Jim has gained $50. Therefore, the total value in society does increase.

Jim Has an Old (Working) Television That He Would Like