Question

Think about your decision to buy the textbook for this course. You paid $250 for the book, but you would have been willing to pay $450 to use the book for the semester. Suppose that at the end of the semester you could keep your textbook or sell it back to the bookstore. Once you have completed the course, the book is worth only $50 to you. The bookstore will pay you 50% of the original $250.
How much total value have you gained? $

Answer 1

Answer:

At the beginning of the semester in gained $200 in value.

At the end of the semester I gained $75.

At the beginning of the semester, I actually paid $250 per book while i could have paid $450 for the book.

The difference between these values represent the consumer surplus.

Consumer surplus is defined as the difference between what a consumer is willing to pay and what s/he actually pays for a product or service.

At the beginning of the semester I had a consumer surplus of $450 - 250 =200$

At the end of the semester, the book is worth only $50 to me, but the book store will pay $125 for the same book.

So, I gain $125 -50 = 75$ by selling the book to the bookstore at the end of the year.

Answer 2

Hello! First, you must think of what the value is worth to you personally. (Which is $50. However, the store is willing to pay 50% of that 250 original price. So you must do simple math and find out what half of 250 is! That gives us 125. When you figure that the value is 125 after 50% off and your personal value for the book was $50 all you have to do is subtract 125 from 50 which gives us your answer!

I hope this helped!

I am, yours most sincerely,
Joshua A. Bunn