Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You buy some beads and string from a student on campus to make a bracelet for yourself. You valued the materials at $11but were charged

You buy some beads and string from a student on campus to make a bracelet for yourself. You valued the materials at $11but were charged only $8. Unknown to you, the seller would have sold them for $5. After you make the bracelet, you like it more than the original materials used to make it. You value the bracelet at $17. One day, a random stranger (who values your bracelet at $28) compliments the bracelet and offers you $20 for it, and you decide to sell it to the stranger. What is the total surplus generated from the original purchase of beads and string combined with the sale of the bracelet to the stranger?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Economics Today The Macro View

Authors: Roger LeRoy Miller

19th Edition

0134478762, 978-0134478760

More Books

Students also viewed these Economics questions

Question

a. What is the name of the university?

Answered: 1 week ago

Question

Explain the factors influencing wage and salary administration.

Answered: 1 week ago

Question

Examine various types of executive compensation plans.

Answered: 1 week ago

Question

1. What is the meaning and definition of banks ?

Answered: 1 week ago