Bob has an idea on how to make some extra cash. He pawns $30 at the local pawn shop for $15. Then he goes to the pub next door and sells the $30 pawn ticket to Jim for $20. It looks like both make money on the deal. Is that true? Who gets the short end of the transaction? Is it Bob, Jim, or the pawn shop?

Bob: sells $30 for $15, and then ticket for $20, gains $5

Pawn shop: buys $30 for $15, sells it for $15, gains nothing

Jim: Buys ticket at $20, spends $15 at pawn shop for $30, loses $5.

 

Overall, Bob earns $5 and Jim loses $5.

Posted by sassy on 2006-04-07 12:33:27