I sold my truck yesterday. My beloved Ford F-150, the top selling vehicle for as long as I can remember. But all good things come to an end (the up side is that all bad things also come to an end) and it was time to allocate those resources elsewhere.
What is amazing is
how merely making a simple trade improved the lives of the two people
involved. As we completed the transaction at a local bank (where the buyer
purchased a Cashier’s Check and I signed over the title) we were all
smiles. Why? I was selling the truck for more than my reservation price,
thus I was enjoying some newly created Producer Surplus and (at least judging by the
smiles) my buyer was getting the truck he wanted for less than his
reservation price and he was enjoying his newly created Consumer
Surplus.
Our trade did not increase the
number of trucks in the world. But by reallocating existing resources in a
more efficient way, Economic Surplus was created and two lives
improved.
Trade truly does make the world a better place.
Trade truly does make the world a better place.
MM
