1. Welfare analysis: Basic concepts Identify whether each of the following state

Question

1. Welfare analysis: Basic concepts Identify whether each of the following statements best illustrates the concept of consumer surplus, producer surplus, or neither. Consumer Surplus Producer Surplus Statement Neither Even though I was willing to pay up to $64 for a watch, I bought a watch for only $56. I paid $48 for a jersey sweater last week. This week, the same store is selling sweaters for $41. I sold a used textbook for $42, even though I was willing to go as low as $34 in order to sell it

Explanation / Answer

solution:

-Even though I was willing to pay up to $64 for a watch, I bought a watch for only $56.

Consumer Surplus

-I paid $48 for a jersey sweater last week. This week, the same store is selling sweaters for $41

Neither

-I sold a used textbook for $42, even though I was willing to go as low as $34 in order to sell it.

Producer Surplus

.

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