Question 1

If the United States legally allowed for a market in transplant organs, it is estimated that one kidney would sell for at least $100,000.

Accepted Answer

A) True 
 B)False

Question 2

Figure 7-14 
-Refer to Figure 7-14. If the government imposes a price ceiling of $50 in this market, then producer surplus will decrease by

Accepted Answer

A)  $325.
B)  $100.
C)  $300.
D)  $200.E) None of the above
F) A) and B)

Question 3

At the equilibrium price of a good, the good will be sold by those sellers

Accepted Answer

A)  whose cost is more than price.
B)  whose cost is less than price.
C)  that can produce the good.
D)  enter the market first.E) None of the above
F) C) and D)

Question 4

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 D)
F) A) and C)

Question 5

A consumer's willingness to pay directly measures

Accepted Answer

A)  the extent to which advertising and other external forces have influenced the consumer's preferences.
B)  the cost of a good to the buyer.
C)  how much a buyer values a good.
D)  consumer surplus.E) None of the above
F) All 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) A) and B)
F) A) and C)

Question 7

Figure 7-28 
-Refer to Figure 7-28. At the quantity Q2, the marginal value to buyers

Accepted Answer

A)  and the marginal cost to sellers are both P2.
B)  is P2, and the marginal cost to sellers is P3.
C)  and the marginal cost to sellers are both P3.
D)  is P3, and the marginal cost to sellers is P2.E) A) and B)
F) None of the above

Question 8

Figure 7-1 
-Refer to Figure 7-1. If the price of the good is $200, then

Accepted Answer

A)  consumer surplus is $150.
B)  consumer surplus is $650.
C)  producer surplus is $650.
D)  producer surplus is $750.E) All of the above
F) A) and B)

Question 9

Total surplus is represented by the area below the

Accepted Answer

A)  demand curve and above the price.
B)  price and up to the point of equilibrium.
C)  demand curve and above the supply curve, up to the equilibrium quantity.
D)  demand curve and above the horizontal axis, up to the equilibrium quantity.E) None of the above
F) A) and D)

Question 10

Producer surplus is the area

Accepted Answer

A)  under the supply curve.
B)  between the supply and demand curves.
C)  below the price and above the supply curve.
D)  under the demand curve and above the price.E) A) and B)
F) A) and C)

Question 11

Figure 7-11 
-Refer to Figure 7-11. If the supply curve is S and the demand curve shifts from D to D', what is the increase in producer surplus to existing producers?

Accepted Answer

A)  $625
B)  $2,500
C)  $3,125
D)  $5,625E) A) and C)
F) A) and B)

Question 12

Figure 7-8 
-Refer to Figure 7-8. At the equilibrium price, consumer surplus is

Accepted Answer

A)  $1,050.
B)  $1,225.
C)  $1,575.
D)  $2,450.E) None of the above
F) C) and D)

Question 13

Total surplus in a market is consumer surplus minus producer surplus.

Accepted Answer

A) True 
 B)False

Question 14

Figure 7-11 
-Refer to Figure 7-11. If the supply curve is S', the demand curve is D, and the equilibrium price is $150, what is the producer surplus?

Accepted Answer

A)  $625
B)  $1,250
C)  $2,500
D)  $5,000E) B) and D)
F) B) and C)

Question 15

Table 7-14 
-Refer to Table 7-14. You and your best friend want to hire a professional photographer to take pictures of your two families. The table shows the costs of the four potential sellers in the local photography market. You and your friend take bids from the sellers. Who offers the two winning bids, and what do they offer to charge for the photography sessions?

Accepted Answer

A)  LeBron and Kobe; more than $450 but less than $600
B)  Kevin and Steve; more than $450 but less than $600
C)  LeBron and Kobe; more than $700
D)  Kevin and Steve; less than $400E) A) and B)
F) All of the above

Question 16

Figure 7-15 
-Refer to Figure 7-15. When the price is P1, producer surplus is

Accepted Answer

A)  A.
B)  C.
C)  A+B.
D)  C+D.E) None of the above
F) B) and C)

Question 17

Scenario 7-1
Suppose market demand is given by the equation 
-Refer to Scenario 7-1. If the market equilibrium price is $10, how much is total consumer surplus in this market?

Accepted Answer

Consumer s...

Question 18

Producer surplus is the

Accepted Answer

A)  area under the supply curve to the left of the amount sold.
B)  amount a seller is paid minus the cost of production.
C)  area between the supply and demand curves, above the equilibrium price.
D)  cost to sellers of participating in a market.E) B) and D)
F) B) and C)

Question 19

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) None of the above
F) C) and D)

Question 20

Many economists believe that restrictions against ticket scalping result in each of the following except

Accepted Answer

A)  a smaller audience for cultural and sporting events.
B)  shorter lines at cultural and sporting events.
C)  less tax revenue for the state.
D)  an increase in ticket prices.E) All of the above
F) A) and C)

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

Total surplus in a market is consumer surplus minus producer surplus.

Correct Answer
verified

Figure 7-14 -Refer to Figure 7-14. If the government imposes a price ceiling of $50 in this market, then producer surplus will decrease by

Correct Answer
verified

Figure 7-11 -Refer to Figure 7-11. If the supply curve is S and the demand curve shifts from D to D', what is the increase in producer surplus to existing producers?

Correct Answer
verified

Correct Answer
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If the United States legally allowed for a market in transplant organs, it is estimated that one kidney would sell for at least $100,000.

Correct Answer
verified

Figure 7-15 -Refer to Figure 7-15. When the price is P1, producer surplus is

Correct Answer
verified

Scenario 7-1 Suppose market demand is given by the equation -Refer to Scenario 7-1. If the market equilibrium price is $10, how much is total consumer surplus in this market?

Correct Answer
verified
Consumer s...
View Answer

Producer surplus is the area

Correct Answer
verified

Total surplus in a market will increase when the government

Correct Answer
verified

Many economists believe that restrictions against ticket scalping result in each of the following except

Correct Answer
verified

A consumer's willingness to pay directly measures

Correct Answer
verified

Total surplus is represented by the area below the

Correct Answer
verified

At the equilibrium price of a good, the good will be sold by those sellers

Correct Answer
verified

Figure 7-8 -Refer to Figure 7-8. At the equilibrium price, consumer surplus is

Correct Answer
verified

Producer surplus is the

Correct Answer
verified

Figure 7-28 -Refer to Figure 7-28. At the quantity Q2, the marginal value to buyers

Correct Answer
verified

Figure 7-1 -Refer to Figure 7-1. If the price of the good is $200, then

Correct Answer
verified

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
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

Figure 7-11 -Refer to Figure 7-11. If the supply curve is S', the demand curve is D, and the equilibrium price is $150, what is the producer surplus?

Correct Answer
verified

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

Total surplus in a market is consumer surplus minus producer surplus.

Correct AnswerverifiedShow Answer

Figure 7-14 -Refer to Figure 7-14. If the government imposes a price ceiling of $50 in this market, then producer surplus will decrease by

Correct AnswerverifiedShow Answer

Figure 7-11 -Refer to Figure 7-11. If the supply curve is S and the demand curve shifts from D to D', what is the increase in producer surplus to existing producers?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the United States legally allowed for a market in transplant organs, it is estimated that one kidney would sell for at least $100,000.

Correct AnswerverifiedShow Answer

Figure 7-15 -Refer to Figure 7-15. When the price is P1, producer surplus is

Correct AnswerverifiedShow Answer

Scenario 7-1 Suppose market demand is given by the equation -Refer to Scenario 7-1. If the market equilibrium price is $10, how much is total consumer surplus in this market?

Correct AnswerverifiedConsumer s...View AnswerShow Answer

Producer surplus is the area

Correct AnswerverifiedShow Answer

Total surplus in a market will increase when the government

Correct AnswerverifiedShow Answer

Many economists believe that restrictions against ticket scalping result in each of the following except

Correct AnswerverifiedShow Answer

A consumer's willingness to pay directly measures

Correct AnswerverifiedShow Answer

Total surplus is represented by the area below the

Correct AnswerverifiedShow Answer

At the equilibrium price of a good, the good will be sold by those sellers

Correct AnswerverifiedShow Answer

Figure 7-8 -Refer to Figure 7-8. At the equilibrium price, consumer surplus is

Correct AnswerverifiedShow Answer

Producer surplus is the

Correct AnswerverifiedShow Answer

Figure 7-28 -Refer to Figure 7-28. At the quantity Q2, the marginal value to buyers

Correct AnswerverifiedShow Answer

Figure 7-1 -Refer to Figure 7-1. If the price of the good is $200, then

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

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

Figure 7-11 -Refer to Figure 7-11. If the supply curve is S', the demand curve is D, and the equilibrium price is $150, what is the producer surplus?

Correct AnswerverifiedShow Answer

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Consumer s...
View Answer

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