1. Give an example of a service or product in which you would pay above the market price. Explain how it relates to consumer surplus.
2. Explain some clues that a consumer could identify to know whether a producer has a surplus. Analyze the first theorem of welfare economics and its importance. If this theorem did not hold true, discuss how would this impact the study of economics?
3. Examine how taxes can make markets fail to achieve economic efficiency and illustrate with your own examples. Explain why the government must force market equilibrium.