8. We have talked about how trade creates value.

Use the information in each example below to compute the total value created in each exchange:

a. Patrick bought an orange pen from Jill for

$2.00. Patrick would have been willing to pay $2.50 for the pen, and Jill would have been willing to sell the pen for $1.25.

b. Hillary found a car on Craigslist for which she would have been willing to pay up to

$10,000. The car’s owner, Jason, needed to sell the car right away and would have accepted $6,000. The price they agreed on was $7,500.