Suppose Lauren, Leslie and Lydia all purchase bulletin boards for their rooms for $15 each. Lauren's willingness to pay was $35, Leslie's willingness to pay was $25, and Lydia's willingness to pay was $30 . Total consumer surplus for these three would be

Economic profit

a. does not exist in competitive markets. b. provides an incentive for investors to undertake risky projects. c. motivates entrepreneurial innovation. d. does all of the above. e. is both b and c.

Suppose Luke values a scoop of Italian gelato at $4 . Leia values a scoop of Italian gelato at $6 . The pre-tax price of a scoop of Italian gelato is $2 . The government imposes a "fat tax" of $3 on each scoop of Italian gelato, and the price rises to $5 . The deadweight loss from the tax is

a. $1. b. $2. c. $3. d. $4.