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

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Question 181

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When demand increases so that market price increases,producer surplus increases because (1)producer surplus received by existing sellers increases,and (2)new sellers enter the market.

A) True
B) False

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Question 182

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Ray buys a new tractor for $118,000.He receives consumer surplus of $13,000 on his purchase.Ray's willingness to pay is

A) $13,000.
B) $105,000.
C) $118,000.
D) $131,000.

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

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Question 183

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Figure 7-13 -Refer to Figure 7-13.Suppose the price of the good is $400.Then,on the first unit of the good that is sold,producer surplus amounts to

Suppose there is an increase in supply that reduces market price.Consumer surplus increases because (1)consumer surplus received by existing buyers increases and (2)new buyers enter the market.

In which of the following circumstances would a buyer be indifferent about buying a good?

Connie can clean windows in large office buildings at a cost of $1 per window.The market price for window-cleaning services is $3 per window.If Connie cleans 100 windows,her producer surplus is $100.

In a competitive market,sales go to those producers who are willing to supply the product at the lowest price.

Figure 7-14 -Refer to Figure 7-14.If total surplus is $750 and consumer surplus is

Figure 7-17 -Refer to Figure 7-17.When the price is P1,area C represents

Table 7-8 The only four producers in a market have the following costs: -Refer to Table 7-8.If Evan,Selena,and Angie sell the good,and the resulting producer surplus is $300,then the price must have been

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.If the market price of an orange increases from $0.60 to $1.05,then consumer surplus

The Surgeon General announces that eating apples promotes healthy teeth.As a result,the equilibrium price of apples

Table 7-7 The following table represents the costs of five possible sellers. -Refer to Table 7-7.Who is a marginal seller when the price is $1,200?

Table 7-11 -Refer to Table 7-11.Both the demand curve and the supply curve are straight lines.At equilibrium,consumer surplus is

Wendy is willing to pay $50 for a concert ticket and Bruce would like to receive $25.If the market price is $40 for this transaction,then the total surplus would be $15.

Table 7-7 The following table represents the costs of five possible sellers. -Refer to Table 7-7.If the price is $1,000,

If a consumer places a value of $20 on a particular good and if the price of the good is $25,then the

Which of the following will cause no change in producer surplus?

Table 7-9 The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality. -Refer to Table 7-9.You wish to purchase 10 piano lessons,so you take bids from each of the sellers.You will not accept a bid below a seller's cost because you are concerned that the seller will not provide all 10 lessons.What bid will you accept?

Economists normally assume people's preferences should be