Your friend really likes a t-shirt that you purchased last week at a concert by your mutually favorite musician group. You purchased the very last shirt in your size and there are no more available. She asks you of there were any way she might obtain the shirt from you. Although a bit reluctant, you might be willing to do so.

What are at least three ways that you could solve this problem in a way that both of you will be happy?

4. suppose that pollution in a neighborhood comes from two factories, with marginal benefit curves given by mb1 = 12 – p1 and mb2 = 8 – p2. the level of pollution in the neighborhood is given by p = p1 + p2. the government wants to limit pollution by instituting a pollution-rights market. the government’s desired level of p is 10, so it prints 10 pollution rights and offers them for sale to the firms. a)find the equilibrium selling price of a pollution right, as well as the allocation of rights (and hence pollution levels) across the two factories. b)repeat part (a) for the case where the government’s desired level of pollution equals 14. c)comment on the usefulness of a pollution rights market in achieving efficient levels of pollution abatement.