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く Ch. 5, Market Outcom. 01/28/19 See Hint You buy some beads and string from a student on campus to make a bracelet for yourself. You valued the materials at $10 but were charged only $7. 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 $30) 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? Total surplus 28 2nd attempt VIEW SOLUTION 0818 MacBook Pro
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Answer #1

The value of the material to the consumer is $10 The value to the seller is s5 The price charged for the material is $7 Total Surplus,-Consumer Surplus + Producer Surplus = (Value to consumer-Price Charged)-(Price Charged-value to seller) = ($10-S7)+(S755) - $5 The value of the material to the consumer is $30 The value to the seller is $17 The price charged for the material is S20 Total Surplus,- Consumer Surplus + Producer Surplus (Value to consumer - Price Charged)+(Price Charged- Value to seller) (S30 $20)+(S20- $17) -$10 $3 = $13 Total Surplus- Total Surplus, +Total Surplus, $5+$13 | $18 Therefore, the total surplus is S18

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