Question 1

Consumer surplus is

Accepted Answer

A)  the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.
B)  the amount a buyer is willing to pay for a good minus the cost of producing the good.
C)  the amount by which the quantity supplied of a good exceeds the quantity demanded of the good.
D)  a buyer's willingness to pay for a good plus the price of the good.E) None of the above
F) A) and C)

Question 2

Total surplus in a market will increase when the government

Accepted Answer

A)  imposes a tax on that market.
B)  imposes a binding price floor on that market.
C)  removes a binding price ceiling from that market.
D)  None of the above is correct.E) A) and B)
F) All of the above

Question 3

Figure 7-34 
-Refer to Figure 7-34. Suppose the government imposes a price floor at $10 per unit in this market. With the price floor, how much is total producer surplus assuming those producers with the lowest cost are the ones who supply the market?

Accepted Answer

Total producer surpl...

Question 4

Steak and chicken are substitutes. A sharp reduction in the supply of steak would

Accepted Answer

A)  increase consumer surplus in the market for steak and decrease producer surplus in the market for chicken.
B)  increase consumer surplus in the market for steak and increase producer surplus in the market for chicken.
C)  decrease consumer surplus in the market for steak and increase producer surplus in the market for chicken.
D)  decrease consumer surplus in the market for steak and decrease producer surplus in the market for chicken.E) B) and D)
F) A) and C)

Question 5

Figure 7-15 
-Refer to Figure 7-15. When the price is P2, producer surplus is

Accepted Answer

A)  A.
B)  A+C.
C)  A+B+C.
D)  D+G.E) A) and B)
F) B) and C)

Question 6

Figure 7-6 
-Refer to Figure 7-6. If the government imposes a price floor of $110 in this market, then consumer surplus will decrease by

Accepted Answer

A)  $200.
B)  $400.
C)  $600.
D)  $800.E) All of the above
F) B) and D)

Question 7

Table 7-7 
-Refer to Table 7-7. You have four 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 offer to sell the tickets for $400. How many tickets do you sell, and what is the total consumer surplus in the market?

Accepted Answer

A)  one ticket; $100
B)  two tickets; $100
C)  two tickets; $0
D)  three tickets; $0E) A) and B)
F) C) and D)

Question 8

Figure 7-28 
-Refer to Figure 7-28. At the quantity Q3,

Accepted Answer

A)  the market is in equilibrium.
B)  consumer surplus is maximized.
C)  the sum of consumer surplus and producer surplus is maximized.
D)  the marginal value to buyers is less than the marginal cost to sellers.E) None of the above
F) A) and B)

Question 9

Figure 7-19 
-Refer to Figure 7-19. At the equilibrium price, consumer surplus is

Accepted Answer

A)  $100.
B)  $200.
C)  $50.
D)  $450.E) A) and B)
F) None of the above

Question 10

A demand curve reflects each of the following except the

Accepted Answer

A)  willingness to pay of all buyers in the market.
B)  value each buyer in the market places on the good.
C)  highest price buyers are willing to pay for each quantity.
D)  ability of buyers to obtain the quantity they desire.E) A) and B)
F) A) and C)

Question 11

Jeff decides that he would pay as much as $2,000 for a new laptop computer. He buys the computer and realizes a consumer surplus of $300. How much did Jeff pay for his computer?

Accepted Answer

A)  $300.
B)  $1,700.
C)  $2,000.
D)  $2,300.E) C) and D)
F) A) and B)

Question 12

Consumer surplus in a market can be represented by the

Accepted Answer

A)  area below the demand curve and above the price.
B)  distance from the demand curve to the horizontal axis.
C)  distance from the demand curve to the vertical axis.
D)  area below the demand curve and above the horizontal axis.E) B) and D)
F) B) and C)

Question 13

The particular price that results in quantity supplied being equal to quantity demanded is the best price because it

Accepted Answer

A)  maximizes costs of the seller.
B)  maximizes tax revenue for the government.
C)  maximizes the combined welfare of buyers and sellers.
D)  minimizes the expenditure of buyers.E) A) and B)
F) B) and C)

Question 14

Suppose Katie, Kendra, and Kristen each purchase a particular type of cell phone at a price of $80. Katie's willingness to pay was $100, Kendra's willingness to pay was $95, and Kristen's willingness to pay was $80. Which of the following statements is correct?

Accepted Answer

A)  For the three individuals together, consumer surplus amounts to $35.
B)  Having bought the cell phone, Kristen is better off than she would have been had she not bought it.
C)  Had the price of the cell phone been $95 rather than $80, Katie and Kendra definitely would have been buyers and Kristen definitely would not have been a buyer.
D)  The fact that all three individuals paid $80 for the same type of cell phone indicates that each one placed the same value on that cell phone.E) B) and D)
F) All of the above

Question 15

Which of the Ten Principles of Economics does welfare economics explain more fully?

Accepted Answer

A)  The cost of something is what you give up to get it.
B)  Rational people think at the margin.
C)  Markets are usually a good way to organize economic activity.
D)  People respond to incentives.E) None of the above
F) C) and D)

Question 16

Table 7-17
The following table shows the willingness to pay for a good for the only four consumers in a market. 
-Refer to Table 7-17. If the price of the good is $20, how many units will be demanded?

Accepted Answer

Three unit...

Question 17

Table 7-4
The numbers in Table 7-1 reveal the maximum willingness to pay for a ticket to a Chicago Cubs vs. St. Louis Cardinal's baseball game at Wrigley Field. 
-Refer to Table 7-4. If tickets sell for $25 each, then what is the total consumer surplus in the market?

Accepted Answer

A)  $25
B)  $35
C)  $60
D)  $110E) C) and D)
F) None of the above

Question 18

If a market is in equilibrium, then it is impossible for a social planner to raise economic welfare by increasing or decreasing the quantity of the good.

Accepted Answer

A) True 
 B)False

Question 19

Table 7-7 
-Refer to Table 7-7. You are selling 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. Which of the following graphs represents the market demand curve?

Accepted Answer

A)   
B)   
C)   
D)   E) A) and B)
F) A) and C)

Question 20

Table 7-11
The only four producers in a market have the following costs:
Seller
Cost
Evan
$50
Selena
$100
Angie
$150
Kris
$200
-Refer to Table 7-11. If Evan, Selena, Angie, and Kris sell the good, and the resulting producer surplus is $700, then the price must have been

Accepted Answer

A)  $200.
B)  $300.
C)  $500.
D)  $700.E) A) and B)
F) A) and C)

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

Jeff decides that he would pay as much as $2,000 for a new laptop computer. He buys the computer and realizes a consumer surplus of $300. How much did Jeff pay for his computer?

Correct Answer
verified

Consumer surplus in a market can be represented by the

Correct Answer
verified

Consumer surplus is

Correct Answer
verified

The particular price that results in quantity supplied being equal to quantity demanded is the best price because it

Correct Answer
verified

Total surplus in a market will increase when the government

Correct Answer
verified

Table 7-17 The following table shows the willingness to pay for a good for the only four consumers in a market. -Refer to Table 7-17. If the price of the good is $20, how many units will be demanded?

Correct Answer
verified
Three unit...
View Answer

Figure 7-34 -Refer to Figure 7-34. Suppose the government imposes a price floor at $10 per unit in this market. With the price floor, how much is total producer surplus assuming those producers with the lowest cost are the ones who supply the market?

Correct Answer
verified
Total producer surpl...
View Answer

A demand curve reflects each of the following except the

Correct Answer
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Correct Answer
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Figure 7-28 -Refer to Figure 7-28. At the quantity Q3,

Correct Answer
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Figure 7-6 -Refer to Figure 7-6. If the government imposes a price floor of $110 in this market, then consumer surplus will decrease by

Correct Answer
verified

Figure 7-15 -Refer to Figure 7-15. When the price is P2, producer surplus is

Correct Answer
verified

If a market is in equilibrium, then it is impossible for a social planner to raise economic welfare by increasing or decreasing the quantity of the good.

Correct Answer
verified

Table 7-11 The only four producers in a market have the following costs: Seller Cost Evan $50 Selena $100 Angie $150 Kris $200 -Refer to Table 7-11. If Evan, Selena, Angie, and Kris sell the good, and the resulting producer surplus is $700, then the price must have been

Correct Answer
verified

Table 7-4 The numbers in Table 7-1 reveal the maximum willingness to pay for a ticket to a Chicago Cubs vs. St. Louis Cardinal's baseball game at Wrigley Field. -Refer to Table 7-4. If tickets sell for $25 each, then what is the total consumer surplus in the market?

Correct Answer
verified

Which of the Ten Principles of Economics does welfare economics explain more fully?

Correct Answer
verified

Figure 7-19 -Refer to Figure 7-19. At the equilibrium price, consumer surplus is

Correct Answer
verified

Correct Answer
verified

Steak and chicken are substitutes. A sharp reduction in the supply of steak would

Correct Answer
verified

Suppose Katie, Kendra, and Kristen each purchase a particular type of cell phone at a price of $80. Katie's willingness to pay was $100, Kendra's willingness to pay was $95, and Kristen's willingness to pay was $80. Which of the following statements is correct?

Correct Answer
verified

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

Jeff decides that he would pay as much as $2,000 for a new laptop computer. He buys the computer and realizes a consumer surplus of $300. How much did Jeff pay for his computer?

Correct AnswerverifiedShow Answer

Consumer surplus in a market can be represented by the

Correct AnswerverifiedShow Answer

Consumer surplus is

Correct AnswerverifiedShow Answer

The particular price that results in quantity supplied being equal to quantity demanded is the best price because it

Correct AnswerverifiedShow Answer

Total surplus in a market will increase when the government

Correct AnswerverifiedShow Answer

Table 7-17 The following table shows the willingness to pay for a good for the only four consumers in a market. -Refer to Table 7-17. If the price of the good is $20, how many units will be demanded?

Correct AnswerverifiedThree unit...View AnswerShow Answer

Figure 7-34 -Refer to Figure 7-34. Suppose the government imposes a price floor at $10 per unit in this market. With the price floor, how much is total producer surplus assuming those producers with the lowest cost are the ones who supply the market?

Correct AnswerverifiedTotal producer surpl...View AnswerShow Answer

A demand curve reflects each of the following except the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 7-28 -Refer to Figure 7-28. At the quantity Q3,

Correct AnswerverifiedShow Answer

Figure 7-6 -Refer to Figure 7-6. If the government imposes a price floor of $110 in this market, then consumer surplus will decrease by

Correct AnswerverifiedShow Answer

Figure 7-15 -Refer to Figure 7-15. When the price is P2, producer surplus is

Correct AnswerverifiedShow Answer

If a market is in equilibrium, then it is impossible for a social planner to raise economic welfare by increasing or decreasing the quantity of the good.

Correct AnswerverifiedShow Answer

Table 7-11 The only four producers in a market have the following costs: Seller Cost Evan $50 Selena $100 Angie $150 Kris $200 -Refer to Table 7-11. If Evan, Selena, Angie, and Kris sell the good, and the resulting producer surplus is $700, then the price must have been

Correct AnswerverifiedShow Answer

Table 7-4 The numbers in Table 7-1 reveal the maximum willingness to pay for a ticket to a Chicago Cubs vs. St. Louis Cardinal's baseball game at Wrigley Field. -Refer to Table 7-4. If tickets sell for $25 each, then what is the total consumer surplus in the market?

Correct AnswerverifiedShow Answer

Which of the Ten Principles of Economics does welfare economics explain more fully?

Correct AnswerverifiedShow Answer

Figure 7-19 -Refer to Figure 7-19. At the equilibrium price, consumer surplus is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Steak and chicken are substitutes. A sharp reduction in the supply of steak would

Correct AnswerverifiedShow Answer

Suppose Katie, Kendra, and Kristen each purchase a particular type of cell phone at a price of $80. Katie's willingness to pay was $100, Kendra's willingness to pay was $95, and Kristen's willingness to pay was $80. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

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Three unit...
View Answer

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Total producer surpl...
View Answer

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