Question 1

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.

Accepted Answer

A) True 
 B)False

Question 2

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 3

If Darby values a soccer ball at $50, and she pays $40 for it, her consumer surplus is $90.

Accepted Answer

A) True 
 B)False

Question 4

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 5

Table 7-2
This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke.   Buyer  Willinenes Ta Raz  David $8.50 Laura $7.00 Mepan $5.50 Mallary $4.00 Audrey $3.50\begin{array} { | l | l | } \hline 	ext { Buyer } & 	ext { Willinenes Ta Raz } \\hline 	ext { David } & \$ 8.50 \\hline 	ext { Laura } & \$ 7.00 \\hline 	ext { Mepan } & \$ 5.50 \\hline 	ext { Mallary } & \$ 4.00 \\hline 	ext { Audrey } & \$ 3.50 \\hline\end{array} Buyer  David  Laura  Mepan  Mallary  Audrey ​ Willinenes Ta Raz $8.50$7.00$5.50$4.00$3.50​​ 
-Refer to Table 7-2. If the price of Vanilla Coke is $6.90, who will purchase the good?

Accepted Answer

A)  all five individuals
B)  Megan, Mallory and Audrey
C)  David, Laura and Megan
D)  David and Laura E) A) and B)
F) All of the above

Question 6

Coffee and tea are substitutes. Bad weather that sharply reduces the coffee bean harvest would

Accepted Answer

A)  increase consumer surplus in the market for coffee and decrease producer surplus in the market for tea.
B)  increase consumer surplus in the market for coffee and increase producer surplus in the market for tea.
C)  decrease consumer surplus in the market for coffee and increase producer surplus in the market for tea.
D)  decrease consumer surplus in the market for coffee and decrease producer surplus in the market for tea.E) None of the above
F) A) and D)

Question 7

Ticket scalping can increase total surplus in the market for tickets to sporting events.

Accepted Answer

A) True 
 B)False

Question 8

In order to calculate consumer surplus in a market, we need to know willingness to pay and price.

Accepted Answer

A) True 
 B)False

Question 9

For any given quantity, the price on a demand curve represents the marginal buyer's willingness to pay.

Accepted Answer

A) True 
 B)False

Question 10

In a market, the marginal buyer is the buyer

Accepted Answer

A)  whose willingness to pay is higher than that of all other buyers and potential buyers.
B)  whose willingness to pay is lower than that of all other buyers and potential buyers.
C)  who is willing to buy exactly one unit of the good.
D)  who would be the first to leave the market if the price were any higher.E) A) and D)
F) All of the above

Question 11

Table 7-8
The only four producers in a market have the following costs:
   Sallar  Cast  Evar $50 Selana $100 Angie $150 Kris $200\begin{array} { | c | c | } \hline 	ext { Sallar } & 	ext { Cast } \\hline 	ext { Evar } & \$ 50 \\hline 	ext { Selana } & \$ 100 \\hline 	ext { Angie } & \$ 150 \\hline 	ext { Kris } & \$ 200 \\hline\end{array} Sallar  Evar  Selana  Angie  Kris ​ Cast $50$100$150$200​​ 
-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

Accepted Answer

A)  $200.
B)  $300.
C)  $450.
D)  $600. E) B) and D)
F) C) and D)

Question 12

Figure 7-21 
-Refer to Figure 7-21. Sellers whose costs are less than the equilibrium price are represented by which line segment?

Accepted Answer

A)  AC.
B)  CK.
C)  BC.
D)  CH.E) A) and D)
F) None of the above

Question 13

Figure 7-10 
-Refer to Figure 7-10. If the equilibrium price rises from $50 to $200, what is the producer surplus to new producers?

Accepted Answer

A)  $625
B)  $3,750
C)  $5,625
D)  $10,000E) B) and C)
F) A) and B)

Question 14

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

Accepted Answer

A)  total benefit.
B)  producer surplus.
C)  consumer surplus.
D)  None of the above is correct.E) A) and B)
F) A) and C)

Question 15

Figure 7-20 
-Refer to Figure 7-20. At equilibrium, producer surplus is measured by the area

Accepted Answer

A)  ACG.
B)  AFG.
C)  KBG.
D)  CFG.E) B) and D)
F) B) and C)

Question 16

Consumer surplus is a good measure of economic welfare if policymakers want to

Accepted Answer

A)  maximize total benefit.
B)  minimize deadweight loss.
C)  respect the preferences of sellers.
D)  respect the preferences of buyers.E) A) and D)
F) A) and B)

Question 17

Total surplus is represented by the area

Accepted Answer

A)  under the demand curve and above the price.
B)  above the supply curve and up to the price.
C)  under the supply curve and up to the price.
D)  between the demand and supply curves up to the point of equilibrium.E) B) and C)
F) None of the above

Question 18

Figure 7-10 
-Refer to Figure 7-10. If the equilibrium price is $200, what is the producer surplus?

Accepted Answer

A)  $625
B)  $3,750
C)  $10,000
D)  $20,000E) A) and C)
F) B) and C)

Question 19

Total surplus is equal to

Accepted Answer

A)  value to buyers - profit to sellers.
B)  value to buyers - cost to sellers.
C)  consumer surplus x producer surplus.
D)  (consumer surplus + producer surplus)  x equilibrium quantity.E) B) and C)
F) A) and B)

Question 20

Figure 7-18 
-Refer to Figure 7-18. At the equilibrium price, total surplus is

Accepted Answer

A)  $480.
B)  $640.
C)  $1,120.
D)  $1,280.E) None of the above
F) A) and B)

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

Correct Answer
verified

Figure 7-10 -Refer to Figure 7-10. If the equilibrium price is $200, what is the producer surplus?

Correct Answer
verified

Correct Answer
verified

In order to calculate consumer surplus in a market, we need to know willingness to pay and price.

Correct Answer
verified

Total surplus is equal to

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

Figure 7-21 -Refer to Figure 7-21. Sellers whose costs are less than the equilibrium price are represented by which line segment?

Correct Answer
verified

Figure 7-10 -Refer to Figure 7-10. If the equilibrium price rises from $50 to $200, what is the producer surplus to new producers?

Correct Answer
verified

Figure 7-20 -Refer to Figure 7-20. At equilibrium, producer surplus is measured by the area

Correct Answer
verified

Ticket scalping can increase total surplus in the market for tickets to sporting events.

Correct Answer
verified

In a market, the marginal buyer is the buyer

Correct Answer
verified

Consumer surplus is a good measure of economic welfare if policymakers want to

Correct Answer
verified

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

Correct Answer
verified

For any given quantity, the price on a demand curve represents the marginal buyer's willingness to pay.

Correct Answer
verified

Coffee and tea are substitutes. Bad weather that sharply reduces the coffee bean harvest would

Correct Answer
verified

Figure 7-18 -Refer to Figure 7-18. At the equilibrium price, total surplus is

Correct Answer
verified

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.

Correct Answer
verified

If Darby values a soccer ball at $50, and she pays $40 for it, her consumer surplus is $90.

Correct Answer
verified

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

Correct Answer
verified

Total surplus is represented by the area

Correct Answer
verified

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

Correct AnswerverifiedShow Answer

Figure 7-10 -Refer to Figure 7-10. If the equilibrium price is $200, what is the producer surplus?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In order to calculate consumer surplus in a market, we need to know willingness to pay and price.

Correct AnswerverifiedShow Answer

Total surplus is equal to

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

Figure 7-21 -Refer to Figure 7-21. Sellers whose costs are less than the equilibrium price are represented by which line segment?

Correct AnswerverifiedShow Answer

Figure 7-10 -Refer to Figure 7-10. If the equilibrium price rises from $50 to $200, what is the producer surplus to new producers?

Correct AnswerverifiedShow Answer

Figure 7-20 -Refer to Figure 7-20. At equilibrium, producer surplus is measured by the area

Correct AnswerverifiedShow Answer

Ticket scalping can increase total surplus in the market for tickets to sporting events.

Correct AnswerverifiedShow Answer

In a market, the marginal buyer is the buyer

Correct AnswerverifiedShow Answer

Consumer surplus is a good measure of economic welfare if policymakers want to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

For any given quantity, the price on a demand curve represents the marginal buyer's willingness to pay.

Correct AnswerverifiedShow Answer

Coffee and tea are substitutes. Bad weather that sharply reduces the coffee bean harvest would

Correct AnswerverifiedShow Answer

Figure 7-18 -Refer to Figure 7-18. At the equilibrium price, total surplus is

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

If Darby values a soccer ball at $50, and she pays $40 for it, her consumer surplus is $90.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Total surplus is represented by the area

Correct AnswerverifiedShow Answer

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