SFU Beedie courses only. See the course list →
Business TutorBusiness Tutor
← Everything for ECON 103
ECON 103

Who gains from trade, and when is it efficient?

See how buyer values and seller costs become surplus areas, and why too little or too much trade loses gains. Then practise with 10 questions and worked answers.

Value and buyers · Step 1 of 12

A buyer’s value sets the most they will pay

Four invented buyers, one disc each
0204060Value ($)ABCDPrice
BuyerValueBuy?Surplus
A$48Yes?
B$36Yes?
C$28Yes?
D$20No?
Total3?
Value per discPrice: $28 per disc
Our shimmer discs, buyers and numbers are invented. Buyers A, B, C and D each want at most one disc and value it at $48, $36, $28 and $20. Willingness to pay is the most a buyer would pay; we count an indifferent buyer as buying.
Try it: Move the price through each buyer’s value and watch who buys.
Price per disc$28
Price
$28
Buyers
3
Who buys
A, B, C
Buy one disc when willingness to pay ≥ price.
A: $48 ≥ $28; buys one.
B: $36 ≥ $28; buys one.
C: $28 ≥ $28; buys one.
D: $20 < $28; does not buy.
Check yourself
A buyer values one disc at exactly its price. Under our counting rule, the buyer…

Exam coming up and the surplus triangles still blur together?

Bring your problem sets. We work through them together until every type feels routine.

FAQ

Questions, answered.

Still unsure about something? Message us and you will hear back within a day.

See all questions
  • In person, we meet at the SFU Burnaby campus or in a private meeting room near Brentwood in Burnaby. Online sessions run on Zoom. You choose when you book.