CHAPTER 7: Consumers, Producers, and the Efficiency of Markets Marks: 1 mark per question THE NEXT TWO (2) QUESTIONS ARE BASED ON THE FOILOWING GRAPH: Price Ouanlity 1. The consumer surplus at a price of$2.00 is: (1) w,x,v (2) 21:12 (3) v, x, 3211 (4) v,x,z,w 2. The consumer surplus gained if the price drops from $2.00 to $1.50 is: (1) v,x,u,z (2) V,X,Y,U (3) x3): (4) v,w,x 3. If Fred is willing to pay $6?5 for a new suit, but is able to buy it on sale for $3?5, Fred values the suit at and his consumer surplus is (1) $6?5,$3?5 (2) $3?5,$3?5 (3) $6?5,$300 (4) $3?5,$6?5 10. The presence of externalities in a market: (1) causes the welfare in the market to depend only on the value to the buyers and costs of the sellers. (2) results in an efficient market equilibrium, from the standpoint of society. (3) can cause a market failure. (4) will only impact the producers and consumers of a good.14. Jessica sells investment advice far 5150 per hour. Her cost is $25 per hour. Jessica's producer surplus is and her willingness to sell is (1) $125;$150 (2) $125,$25 (3) $25;$125 (4) $25:$25