Question

1. Welfare analysis: Basic concepts

Identify whether each of the following statements best illustrates the concept of consumer surplus, producer surplus, or neither.

Statement	Consumer Surplus	Producer Surplus	Neither
I sold a used laptop for $149, even though I was willing to go as low as $140 in order to sell it.
I sold a watch for $59 on eBay last week. This week, someone offered me $145 for it.
Even though I was willing to pay up to $46 for a jersey sweater, I bought a jersey sweater for only $39.

Answer 1

Answer
I sold a used laptop for $149, even though I was willing to go as low as $140 in order to sell it.
producer surplus
Producer suplus=selling price-minimum selling price
=149-140=$9
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I sold a watch for $59 on eBay last week. This week, someone offered me $145 for it.
Neither
The statement does not give any information on the minimum selling price.

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Even though I was willing to pay up to $46 for a jersey sweater, I bought a jersey sweater for only $39.
Consumer surplus
Consumer suplus=maximum willingness to pay-price paid
=46-39
=$7