1. Consider the following statements when answering this question:

I.

Consumer surplus is the difference between the amount paid and the marginal cost of producing another unit.

II

A deadweight loss is a net loss of total surplus as a result of under or over production.

Select one:

a.I is true, and II is false.

b.I and II are true.

c.I and II are false.

d.I is false, and II is true.

2. Deadweight loss refers to:

Select one:

a.net losses in total surplus.

b.losses in consumer surplus associated with excess government regulations.

c.situations where market prices fail to capture all of the costs and benefits of a policy

d.losses due to the policies of labor unions.

Price 70 Price 70 Idollars Idollars per widget) per widget) 60 SO SO 40 Supply. S 40 Supply. S 30 30 20 20 Demand. D Demand, D 10 20 10 50 60 Quantity 50 60 Quantity of widgets 5. of widgets 3. If the government establishes a maximum price of $20, the resulting deadweight loss If the market is in equilibrium, total consumer surplus is: will be: Select one: a. $600. a. 400$ b. 0$ b. 1200$ C. 20$ c. 800$ d. 30$ d. 30$ e. 300$ e. 70$ Price 70 (dollars per widget) 60 50 40 Supply. S 30 20 10 Demand, D 50 60 Quantity 4. of widgets If the market is in equilibrium, the consumer surplus earned by the buyer of the 10th unit is: Select one: a. $22.50. b. $30.00. C. $5.00 d. $15.00