You just purchased a lawn mower from your next-door neighbor.How can we measure the gains from this transaction?

Question

Quizplus · Accepted Answer

The gains from this transaction can be measured by adding the actual benefit (or surplus) that you receive from acquiring the lawn mower to the actual benefit (or surplus) that your neighbor receives from selling it. Both parties typically enter into the transaction because they each expect to gain from it, you by getting the lawn mower you value more than the money paid, and your neighbor by receiving money they value more than the lawn mower.

You Just Purchased a Lawn Mower from Your Next-Door Neighbor