Class Notes (922,004)
CA (542,703)
UBC (12,802)
ECON (507)
ECON 101 (120)
Lecture 13

ECON 101 Lecture 13: Consumer Surplus
Premium

3 Pages
355 Views
Likes

Department
Economics
Course Code
ECON 101
Professor
Marina Adshade

This preview shows page 1. Sign up to view the full 3 pages of the document.
ECON 101 - Lecture #13 - Consumer Surplus
Introduction
Previous lectures have been focusing on what are the causes and results of economic
changes, but not whether the changes on desirable
In other words, we are moving from positive analysis toward normative
Welfare economics decide if the allocation of resources are desirable
Both buyers and sellers gain from trade
Consumer surplus
Producer surplus
Welfare economics involves the analysis of these two kinds of surpluses
Consumer Surplus
Willingness to pay (WTP)
The maximum amount a buyer is willing to pay for a good
The difference between WTP and the market is the consumer surplus
Basically, consumer surplus is a money measure of consumers’ gains from trade
Consider the following comic books market as presented by Table 1
Person Willingness to Pay ($)
Aleisha 59
Brad 45
Claudia 35
Darren 25
Edwina 15
Analysis of the table
Price above 59, quantity = 0
Price below 50 but above 45, quantity = 1 (Aleisha)
Price below 45 but above 35, quantity = 2 (Aleisha and Brad)
Price below 35 but above 25, quantity = 3 (Aleisha, Brad, and Claudia)
Price below 25 but above 15, quantity = 4 (Aleisha, Brad, Claudia, and Darren)
Price below 15, quantity = 5 (Aleisha, Brad, Claudia, Darren, and Edwina)
With that, a graph could be constructed
Figure 1. The graph of willingness to pay curve for the comic books market.

Loved by over 2.2 million students

Over 90% improved by at least one letter grade.

Leah — University of Toronto

OneClass has been such a huge help in my studies at UofT especially since I am a transfer student. OneClass is the study buddy I never had before and definitely gives me the extra push to get from a B to an A!

Leah — University of Toronto
Saarim — University of Michigan

Balancing social life With academics can be difficult, that is why I'm so glad that OneClass is out there where I can find the top notes for all of my classes. Now I can be the all-star student I want to be.

Saarim — University of Michigan
Jenna — University of Wisconsin

As a college student living on a college budget, I love how easy it is to earn gift cards just by submitting my notes.

Jenna — University of Wisconsin
Anne — University of California

OneClass has allowed me to catch up with my most difficult course! #lifesaver

Anne — University of California
Description
ECON 101 - Lecture #13 - Consumer Surplus Introduction ● Previous lectures have been focusing on what are the causes and results of economic changes, but not whether the changes on desirable ○ In other words, we are moving from positive analysis toward normative ○ Welfare economics decide if the allocation of resources are desirable ● Both buyers and sellers gain from trade ○ Consumer surplus ○ Producer surplus ● Welfare economics involves the analysis of these two kinds of surpluses Consumer Surplus ● Willingness to pay (WTP) ○ The maximum amount a buyer is willing to pay for a good ● The difference between WTP and the market is the consumer surplus ● Basically, consumer surplus is a money measure of consumers’ gains from trade ● Consider the following comic books market as presented by Table 1 Person Willingness to Pay ($) Aleisha 59 Brad 45 Claudia 35 Darren 25 Edwina 15 ● Analysis of the table ○ Price above 59, quantity = 0 ○ Price below 50 but above 45, quantity = 1 (Aleisha) ○ Price below 45 but above 35, quantity = 2 (Aleisha and Brad) ○ Price below 35 but above 25, quantity = 3 (Aleisha, Brad, and Claudia) ○ Price below 25 but above 15, quantity = 4 (Aleisha, Brad, Claudia, and Darren) ○ Price below 15, quantity = 5 (Aleisha, Brad, Claudia, Darren, and Edwina) ● With that, a graph could be constructed Figure 1. The graph of willingness to pay curve for the comic books market. ● Willing t
More Less
Unlock Document


Only page 1 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit