2. The effect of transaction costs on decision making This Wendy's commercial confuses the notions of appreciation and consumer surplus. Recall that consumer surplus is the difference between what a consumer is willing to pay for a good and what he or she actually pays for it. According to standard economic theory, consumer surplus must always be 7. Economists often simplify economic models by ignoring the role that transaction costs play in decision making. Purchasing a good often involves explicit transaction costs, such as the cost of the gasoline used to get to the store, but there are also implicit transaction costs such as the opportunity cost ofthe time spent shopping for and acquiring a product. The remaining questions will help you understand the importance oftlansaction costs. Suppose Ana values consuming her first Double Stack burger at $3.00.. and she places no value on any additional burgers. Based on Ana's willingness to pay, her demand curve is plotted on the following graph. For simplicity, assume there is no time cost of waiting in line for her rst Double Stack burger. Using the green rectangie (triangie symbols}, shade the area representing Ana's consumer surpius from purchasing a burger under these conditions on o're foiiowing graph. 5 4 Consumer Surplus \"E g Demand .9 3 *5 D. E E To B 2 LIJ Q [I o. Pnce 1 O D 1 2 3 4 5 QUANTITY {Douhle Stack burgers}