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22 January, 07:49

First, label the following scenarios as to whether they would create a producer or consumer surplus. Then, after you have labeled each scenario, calculate the ensuing surplus.

Jeff finds some steaks for $16 for which he would have been willing to pay $20. The butcher notices the meat is near the expiration date and gives him an extra 75% off.

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  1. 22 January, 10:25
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    Alice is willing to spend $30 on a pair of jeans, and has a coupon for $10 off she found online. She selects and purchases a $35 pair of jeans, pre-discount.

    (Alice's consumer surplus, $5)

    Jeff finds some steaks for $16 for which he would have been willing to pay $20. The butcher notices the meat is near the expiration date and gives him an extra 75% off.

    (Jeff's consumer surplus, $16)

    Nicole has in her possession a hockey puck from the 2010 Winter Olympic Games and sells it on eBay. She will only sell the puck if the winning bid is greater than or equal to $500. After bidding closes, the last bid stands at $500.

    (Nicole's producer surplus, $0)

    Claire is trying to sell her used calculus textbook online. She asks for $150 or best offer and is willing to sell for anything over $100. She is able to sell it for $125.

    (Claire's producer surplus, $25)

    Roy is willing to pay $2.50 for a sports drink. He notices the price is $2.79 and chooses not to purchase a sports drink. (Roy's consumer surplus, $0)
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