Answer to Question #130211 in Macroeconomics for Barb Queenie

Question

Suppose you own a bicycle but haven't found the time to ride it much lately. These days, it is only worth $27 to you. One of your close friends, who recently got a job at the college bookstore two miles down the road, wants to take it off your hands. He offers you $70 for the bicycle, and you gladly accept. Your friend is also happy because he thinks the bicycle is worth $109. How much total value was created from this trade?

Answer 1

Value for bicycle owner: $70-$27=$43

Value for buyer: $109-$70 = $39

Total value: $43+$39=$82