1. Assume that the price underestimates the value that society places on the flu vaccine. If firms produce where P = MC, firms will be producingthe socially efficient amount of flu vaccine. a) exactlyb) more thanc) less thand) sometimes more than and sometimes less than2. You value your Microeconomics textbook at $100. Someone else (e. g., one of your classmates) values it at $125, and that person is willing to pay you $120 for your textbook. Would selling your textbook to this person for $120 be Pareto efficient?A) No, because you did not receive the maximum amount the other person would have been willing to pay for the textbook. B) No, the person paid you $20 for the book so his net benefit was $10, whereas your net benefit was only $5. For this change to be Pareto efficient, each of you should have the same net benefit. C) Yes, because both of you are better off as a result of the trade. D) Yes, because even though you gain from the trade and he loses, there is the potential for you to compensate him for his loss.