ECN220_Dowell_Week3_Assignmtn.docx

What is the value of her consumer surplus four

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will Lori choose to have repainted? What is the value of her consumer surplus? Four apartments are painted. ($5000 - $2000) + ($4000 - $2000) + ($3000 - $2000) + ($2000 - $2000) = $6000 consumer surplus. d. What happened to Ms. Landlord’s consumer surplus when the price of having her apartments repainted fell? Why? Her consumer surplus took a rise because she gains surplus on the unit she would already have bought at the original price. Also, she gains surplus on the new units she is now purchasing because of lower prices.
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2. Share two experiences where you experienced consumer surplus. (you paid less than you otherwise would have been willing to pay). Also share your thoughts on why the surplus happened; in other words, why did you think you would pay more than you did.   First example of consumer surplus experience: I always set an amount for groceries based on the list of things we needed. I estimate based on what each item normally costs. Last week, I had set a list for $175 budget. I was willing to pay $175 to get all the needed things for the house. After the checkout, I only had to pay $100 even. That left me with $75 consumer surplus. All of it went into savings. Second example: I went out with my grandpa to our local restaurant knowing what their regular prices were, I brought $20 with me. After all that is eaten, I ended up only paying $11 because of their specials. Minus the 4 dollars for the waitress, I ended up with $5 consumer surplus. I believe that surplus happens when we have an amount that we set in our mind for our willingness to pay. Oftentimes, the prices change or the special savings event occurs without our knowledge to factor it in.
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  • Summer '16
  • Laura Sheneman
  • Apartment, Lori Landlord, value Lori Landlord places

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