Question 1

If the price a consumer pays for a product is equal to a consumer's willingness to pay,then the consumer surplus relevant to that purchase is

Accepted Answer

A)   zero.
B)   negative,and the consumer would not purchase the product.
C)   positive,and the consumer would purchase the product.
D)   There is not enough information given to answer this question.E) A) and B)
F) All of the above

Question 2

Figure 7-19 
-Refer to Figure 7-19.The equilibrium price is

Accepted Answer

A)   P1.
B)   P2.
C)   P3.
D)   P4.E) A) and B)
F) A) and C)

Question 3

Figure 7-16 
-Refer to Figure 7-16.For quantities less than M,the value to the marginal buyer is

Accepted Answer

A)   greater than the cost to the marginal seller,so increasing the quantity increases total surplus.
B)   less than the cost to the marginal seller,so increasing the quantity increases total surplus.
C)   greater than the cost to the marginal seller,so decreasing the quantity increases total surplus.
D)   less than the cost to the marginal seller,so decreasing the quantity increases total surplus.E) A) and D)
F) All of the above

Question 4

The decisions of buyers and sellers that affect people who are not participants in the market create

Accepted Answer

A)   market power.
B)   externalities.
C)   profiteering.
D)   market equilibrium.E) None of the above
F) A) and D)

Question 5

Figure 7-7 
-Refer to Figure 7-7.If the price of the good is $14,then producer surplus is

Accepted Answer

A)   $17.
B)   $22.
C)   $25.
D)   $28.E) A) and B)
F) None of the above

Question 6

Cameron visits a sporting goods store to buy a new set of golf clubs.He is willing to pay $750 for the clubs but buys them on sale for $575.Cameron's consumer surplus from the purchase is

Accepted Answer

A)   $175.
B)   $575.
C)   $750.
D)   $1,325.E) C) and D)
F) B) and D)

Question 7

At the equilibrium price of a good,the good will be purchased by those buyers who

Accepted Answer

A)   value the good more than price.
B)   value the good less than price.
C)   have the money to buy the good.
D)   consider the good a necessity.E) A) and D)
F) C) and D)

Question 8

Table 7-6
 
-Refer to Table 7-6.You have two essentially identical extra tickets to the Midwest Regional Sweet 16 game in the men's NCAA basketball tournament.The table shows the willingness to pay of the four potential buyers in the market for a ticket to the game.You hold an auction to sell the two tickets.Michael and Earvin each offer to pay $360 for a ticket,and you sell them the two tickets.What is the total consumer surplus in the market?

Accepted Answer

A)   $720
B)   $180
C)   $140
D)   $40E) None of the above
F) All of the above

Question 9

Producer surplus is

Accepted Answer

A)   measured using the demand curve for a good.
B)   always a negative number for sellers in a competitive market.
C)   the amount a seller is paid minus the cost of production.
D)   the opportunity cost of production minus the cost of producing goods that go unsold.E) B) and D)
F) B) and C)

Question 10

Consumer surplus

Accepted Answer

A)   is closely related to the supply curve for a product.
B)   is represented by a rectangle on a supply-demand graph when the demand curve is a straight,downward-sloping line.
C)   is measured using the demand curve for a product.
D)   does not reflect economic well-being in most markets.E) C) and D)
F) A) and B)

Question 11

Table 7-10
 
-Refer to Table 7-10.You want to hire a professional photographer to take pictures of your family.The table shows the costs of the four potential sellers in the local photography market.You hire Kevin for a price of $500.What is his producer surplus?

Accepted Answer

A)   $500
B)   $150
C)   $100
D)   $50E) A) and B)
F) A) and D)

Question 12

Table 7-7
The following table represents the costs of five possible sellers.
 
-Refer to Table 7-7.If the market price is $900,the combined total cost of all participating sellers is

Accepted Answer

A)   $3,700.
B)   $2,700.
C)   $2,250.
D)   $1,250.E) A) and B)
F) A) and C)

Question 13

Consumer surplus can be measured as the area between the demand curve and the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 14

Raisin bran and milk are complementary goods.A decrease in the price of raisins will

Accepted Answer

A)   increase consumer surplus in the market for raisin bran and decrease producer surplus in the market for milk.
B)   increase consumer surplus in the market for raisin bran and increase producer surplus in the market for milk.
C)   decrease consumer surplus in the market for raisin bran and increase producer surplus in the market for milk.
D)   decrease consumer surplus in the market for raisin bran and decrease producer surplus in the market for milk.E) B) and C)
F) A) and B)

Question 15

The lower the price,the lower the consumer surplus,all else equal.

Accepted Answer

A) True 
 B)False

Question 16

All else equal,an increase in demand will cause an increase in producer surplus.

Accepted Answer

A) True 
 B)False

Question 17

The area below the price and above the supply curve measures the producer surplus in a market.

Accepted Answer

A) True 
 B)False

Question 18

Total surplus is

Accepted Answer

A)   equal to producer surplus plus consumer surplus.
B)   equal to the total cost to sellers minus the total value to buyers.
C)   equal to consumers' willingness to pay plus producers' cost.
D)   greater than the sum of consumer surplus plus producer surplus.E) None of the above
F) B) and D)

Question 19

Figure 7-15 
-Refer to Figure 7-15.At the equilibrium price,consumer surplus is

Accepted Answer

A)   $150.
B)   $200.
C)   $250.
D)   $350.E) A) and C)
F) C) and D)

Question 20

Table 7-5
For each of three potential buyers of oranges,the table displays the willingness to pay for the first three oranges of the day.Assume Alex,Barb,and Carlos are the only three buyers of oranges,and only three oranges can be supplied per day.
 
-Refer to Table 7-5.The market quantity of oranges demanded per day is exactly 5 if the price of an orange,P,satisfies

Accepted Answer

A)   $1.00 
B)   $0.80 
C)   $0.80 
D)   $0.75 < P < $0.80.E) A) and D)
F) A) and C)

Exam 7: Consumers, producers, and the Efficiency of Markets

Figure 7-7 -Refer to Figure 7-7.If the price of the good is $14,then producer surplus is

Correct Answer
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Producer surplus is

Correct Answer
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At the equilibrium price of a good,the good will be purchased by those buyers who

Correct Answer
verified

All else equal,an increase in demand will cause an increase in producer surplus.

Correct Answer
verified

The area below the price and above the supply curve measures the producer surplus in a market.

Correct Answer
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Total surplus is

Correct Answer
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Table 7-10 -Refer to Table 7-10.You want to hire a professional photographer to take pictures of your family.The table shows the costs of the four potential sellers in the local photography market.You hire Kevin for a price of $500.What is his producer surplus?

Correct Answer
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Figure 7-19 -Refer to Figure 7-19.The equilibrium price is

Correct Answer
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Table 7-7 The following table represents the costs of five possible sellers. -Refer to Table 7-7.If the market price is $900,the combined total cost of all participating sellers is

Correct Answer
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The lower the price,the lower the consumer surplus,all else equal.

Correct Answer
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If the price a consumer pays for a product is equal to a consumer's willingness to pay,then the consumer surplus relevant to that purchase is

Correct Answer
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The decisions of buyers and sellers that affect people who are not participants in the market create

Correct Answer
verified

Figure 7-16 -Refer to Figure 7-16.For quantities less than M,the value to the marginal buyer is

Correct Answer
verified

Cameron visits a sporting goods store to buy a new set of golf clubs.He is willing to pay $750 for the clubs but buys them on sale for $575.Cameron's consumer surplus from the purchase is

Correct Answer
verified

Consumer surplus can be measured as the area between the demand curve and the equilibrium price.

Correct Answer
verified

Raisin bran and milk are complementary goods.A decrease in the price of raisins will

Correct Answer
verified

Figure 7-15 -Refer to Figure 7-15.At the equilibrium price,consumer surplus is

Correct Answer
verified

Correct Answer
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Consumer surplus

Correct Answer
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Exam 7: Consumers, producers, and the Efficiency of Markets

Figure 7-7 -Refer to Figure 7-7.If the price of the good is $14,then producer surplus is

Correct AnswerverifiedShow Answer

Producer surplus is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

At the equilibrium price of a good,the good will be purchased by those buyers who

Correct AnswerverifiedShow Answer

All else equal,an increase in demand will cause an increase in producer surplus.

Correct AnswerverifiedShow Answer

The area below the price and above the supply curve measures the producer surplus in a market.

Correct AnswerverifiedShow Answer

Total surplus is

Correct AnswerverifiedShow Answer

Table 7-10 -Refer to Table 7-10.You want to hire a professional photographer to take pictures of your family.The table shows the costs of the four potential sellers in the local photography market.You hire Kevin for a price of $500.What is his producer surplus?

Correct AnswerverifiedShow Answer

Figure 7-19 -Refer to Figure 7-19.The equilibrium price is

Correct AnswerverifiedShow Answer

Table 7-7 The following table represents the costs of five possible sellers. -Refer to Table 7-7.If the market price is $900,the combined total cost of all participating sellers is

Correct AnswerverifiedShow Answer

The lower the price,the lower the consumer surplus,all else equal.

Correct AnswerverifiedShow Answer

If the price a consumer pays for a product is equal to a consumer's willingness to pay,then the consumer surplus relevant to that purchase is

Correct AnswerverifiedShow Answer

The decisions of buyers and sellers that affect people who are not participants in the market create

Correct AnswerverifiedShow Answer

Figure 7-16 -Refer to Figure 7-16.For quantities less than M,the value to the marginal buyer is

Correct AnswerverifiedShow Answer

Cameron visits a sporting goods store to buy a new set of golf clubs.He is willing to pay $750 for the clubs but buys them on sale for $575.Cameron's consumer surplus from the purchase is

Correct AnswerverifiedShow Answer

Consumer surplus can be measured as the area between the demand curve and the equilibrium price.

Correct AnswerverifiedShow Answer

Raisin bran and milk are complementary goods.A decrease in the price of raisins will

Correct AnswerverifiedShow Answer

Figure 7-15 -Refer to Figure 7-15.At the equilibrium price,consumer surplus is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Consumer surplus

Correct AnswerverifiedShow Answer

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