1. Watch the following video and answer the questions below:https://mru.org/courses/dictionary-economics/consumer-surplus-definition?utm_source=EX&utm_medium=MRU&utm_campaign=MRUEmail&utm_content=consumer-surplus-definition

a.Erika is walking around a big department store when she finds a shirt that she really loves. The price tag is torn off, so she can't find the price. She decides that as long as the shirt is less than $40, she will buy it. When she goes to the register, she discovers that the shirt originally cost $50, but it's on sale for $32. Which of the following is true about Erika's consumer surplus.

1. If Erika buys the shirt, she will have a consumer surplus of $32.
2. Erika should not buy the shirt because her consumer surplus would be -$10.
3. If Erika buys the shirt, she will have a consumer surplus of $18.
4. If Erika buys the shirt, she will have a consumer surplus of $10.
5. If Erika buys the shirt, she will have a consumer surplus of $8.

Customer Ice Cream

Arya $8

John's $5

Cersei $4

Daenerys $2

b. The table above shows reservation prices for ice cream cones for individual consumers. Each consumer is only interested in buying one ice cream cone. The price of an ice cream cone is $3. Use this information to answer the following questions.

How many people will buy ice cream?

What is John's consumer surplus?

If these people make up the entire market, what is consumer surplus in the market for ice cream?

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