Question 1

Total surplus is the excess of consumer surplus over producer surplus.

Accepted Answer

A) True 
 B)False

Question 2

We can measure total producer surplus for good X as the:

Accepted Answer

A) sum of the individual producer surpluses for all buyers of X. 
B) area below the supply curve for X and above the price of X. 
C) area bounded by the supply curve for X and the two axes. 
D) area between the demand curve for X and the supply curve for X. 
A) sum of the individual producer surpluses for all buyers of X. 
B) area below the supply curve for X and above the price of X. 
C) area bounded by the supply curve for X and the two axes. 
D) area between the demand curve for X and the supply curve for X.

Question 3

Consumer surplus is represented by the area _____ the demand curve and _____ the price that the consumer pays.

Accepted Answer

A) above;below 
B) above;above 
C) below;above 
D) below;below 
A) above;below 
B) above;above 
C) below;above 
D) below;below

Question 4

An increase in the consumer surplus in the market for milkshakes may result from a(n)_____ in the _____ of milkshakes.

Accepted Answer

A) increase;price 
B) increase;supply 
C) decrease;demand 
D) decrease;supply 
A) increase;price 
B) increase;supply 
C) decrease;demand 
D) decrease;supply

Question 5

Use the following to answer question:  
-(Figure: Consumer and Producer Surplus)Look at the figure Consumer and Producer Surplus.An increase in supply will:

Accepted Answer

A) increase consumer surplus. 
B) will have no impact on consumer surplus 
C) decrease consumer surplus 
D) not enough information to determine the impact on consumer surplus 
A) increase consumer surplus. 
B) will have no impact on consumer surplus 
C) decrease consumer surplus 
D) not enough information to determine the impact on consumer surplus

Question 6

Which statement is TRUE concerning the relationship between efficiency and equity?

Accepted Answer

A) Policies designed to increase efficiency will also increase equity. 
B) Policies designed to increase equity will also increase efficiency. 
C) Policies designed to increase efficiency may decrease equity. 
D) There is no trade-off between efficiency and equity if policies are fair. 
A) Policies designed to increase efficiency will also increase equity. 
B) Policies designed to increase equity will also increase efficiency. 
C) Policies designed to increase efficiency may decrease equity. 
D) There is no trade-off between efficiency and equity if policies are fair.

Question 7

The total producer surplus in the Wisconsin milk market is the:

Accepted Answer

A) sum of the individual producer surpluses in this market. 
B) sum of all prices paid multiplied by the number of gallons of milk sold. 
C) total revenue of the milk producers in Wisconsin. 
D) total cost of selling milk in Wisconsin. 
A) sum of the individual producer surpluses in this market. 
B) sum of all prices paid multiplied by the number of gallons of milk sold. 
C) total revenue of the milk producers in Wisconsin. 
D) total cost of selling milk in Wisconsin.

Question 8

Use the following to answer question:  
-(Figure: Producer Surplus)Look at the figure Producer Surplus.When the price rises from $25 to $35,producer surplus _____ for a total producer surplus of _____.

Accepted Answer

A) increases by $10;$30 
B) decreases by $10;$30 
C) increases by $30;$60 
D) decreases by $35;$100 
A) increases by $10;$30 
B) decreases by $10;$30 
C) increases by $30;$60 
D) decreases by $35;$100

Question 9

If there is an increase in demand (parallel shift of demand to the right),assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus:

Accepted Answer

A) will increase. 
B) will decrease. 
C) will remain the same. 
D) may change,but we can't tell how. 
A) will increase. 
B) will decrease. 
C) will remain the same. 
D) may change,but we can't tell how.

Question 10

Use the following to answer question:  
-(Table: Willingness to Pay for Basketball Sneakers)The table Willingness to Pay for Basketball Sneakers shows each player's willingness to pay for basketball sneakers.Assume that each player wants to buy at most,one pair of sneakers.If the price of basketball sneakers is $180,how many pairs will be purchased?

Accepted Answer

A) none 
B) one 
C) two 
D) three 
A) none 
B) one 
C) two 
D) three

Question 11

Use the following to answer question:  
-(Table: Consumer Surplus)Use Table: Consumer Surplus.Assume that each student wants to buy one ticket.If the price of a ticket to see The Nutty Nutcracker is $50,Lois's consumer surplus is:

Accepted Answer

A) $60. 
B) $50. 
C) $15. 
D) $240. 
A) $60. 
B) $50. 
C) $15. 
D) $240.

Question 12

Use the following to answer question:  
-(Table: Consumer Surplus)Use Table: Consumer Surplus.Assume that each student wants to buy one ticket.If the price of a ticket to see The Nutty Nutcracker is $75,Lois's consumer surplus is:

Accepted Answer

A) $25. 
B) $60. 
C) $75. 
D) $100. 
A) $25. 
B) $60. 
C) $75. 
D) $100.

Question 13

The total producer surplus for a good CANNOT be calculated as the:

Accepted Answer

A) sum of the individual producer surpluses for all sellers of the good. 
B) area below the supply curve for the good up to the quantity of the good sold. 
C) area above the supply curve and below the price that sellers receive for the good being sold. 
D) sum,for all sellers of the good,of the difference between what each seller receives and the minimum amount he or she is willing to accept for selling the good. 
A) sum of the individual producer surpluses for all sellers of the good. 
B) area below the supply curve for the good up to the quantity of the good sold. 
C) area above the supply curve and below the price that sellers receive for the good being sold. 
D) sum,for all sellers of the good,of the difference between what each seller receives and the minimum amount he or she is willing to accept for selling the good.

Question 14

Use the following to answer question:  
-(Figure: Wireless Mouse Market)Look at the figure Wireless Mouse Market.Calculate the change in producer surplus when the price increases from $10 to $15.

Accepted Answer

A) $250 
B) $1,000 
C) $625 
D) $1,125 
A) $250 
B) $1,000 
C) $625 
D) $1,125

Question 15

Alex is willing to buy the last ticket to the Billy Bragg concert for $15,while Jake is willing to pay $25.Alex is first in line and buys a ticket for $15.He then resells his ticket to Jake for $20.By reselling the ticket instead of going to the concert himself,Alex caused:

Accepted Answer

A) the sum of the consumer and producer surplus to increase. 
B) the sum of the consumer and producer surplus to decrease. 
C) a deadweight loss of $5. 
D) consumer surplus to decrease and producer surplus to increase. 
A) the sum of the consumer and producer surplus to increase. 
B) the sum of the consumer and producer surplus to decrease. 
C) a deadweight loss of $5. 
D) consumer surplus to decrease and producer surplus to increase.

Question 16

Use the following to answer question:  
-(Figure: Producer Surplus)Look at the figure Producer Surplus.When the price falls from $45 to $35,producer surplus _____ for a total producer surplus of _____.

Accepted Answer

A) increases by $10;$140 
B) decreases by $40;$60 
C) increases by $35;$180 
D) decreases by $10;$140 
A) increases by $10;$140 
B) decreases by $40;$60 
C) increases by $35;$180 
D) decreases by $10;$140

Question 17

Peanut butter is an inferior good.If there is an increase in income,total surplus in the peanut butter market:

Accepted Answer

A) will increase. 
B) will decrease. 
C) will not change. 
D) may change,but we cannot determine the change without more information. 
A) will increase. 
B) will decrease. 
C) will not change. 
D) may change,but we cannot determine the change without more information.

Question 18

Use the following to answer question:  
-(Figure: The Gains from Trade)Look at the figure The Gains from Trade.What is the total surplus in this market when the demand curve is D1 and the market is in equilibrium?

Accepted Answer

A) $25.00 
B) $31.25 
C) $62.50 
D) $90.00 
A) $25.00 
B) $31.25 
C) $62.50 
D) $90.00

Question 19

Use the following to answer question:  
-(Table: Pumpkin Market)There are two consumers,Andy and Ben,in the market for pumpkins.Their willingness to pay for each pumpkin is shown in the table Pumpkin Market.There are two producers of pumpkins,Cindy and Diane,and their costs are also shown.The equilibrium price for pumpkins is $8 and the equilibrium quantity is 5.If Cindy sells one fewer pumpkin and Diane sells one more pumpkin than in equilibrium,total surplus will _____ by _____.

Accepted Answer

A) increase;$16 
B) increase;$14 
C) decrease;$1 
D) decrease;$2 
A) increase;$16 
B) increase;$14 
C) decrease;$1 
D) decrease;$2

Question 20

Assuming that gasoline and cars are complements in consumption,if the price of gasoline rises,the producer surplus of auto manufacturers decreases.

Accepted Answer

A) True 
 B)False

Total surplus is the excess of consumer surplus over producer surplus.

We can measure total producer surplus for good X as the:

Consumer surplus is represented by the area _ the demand curve and _ the price that the consumer pays.

An increase in the consumer surplus in the market for milkshakes may result from a(n)_ in the _ of milkshakes.

Use the following to answer question: -(Figure: Consumer and Producer Surplus)Look at the figure Consumer and Producer Surplus.An increase in supply will:

Which statement is TRUE concerning the relationship between efficiency and equity?

The total producer surplus in the Wisconsin milk market is the:

Use the following to answer question: -(Figure: Producer Surplus)Look at the figure Producer Surplus.When the price rises from $25 to $35,producer surplus _ for a total producer surplus of _.

If there is an increase in demand (parallel shift of demand to the right),assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus:

Use the following to answer question: -(Table: Consumer Surplus)Use Table: Consumer Surplus.Assume that each student wants to buy one ticket.If the price of a ticket to see The Nutty Nutcracker is $50,Lois's consumer surplus is:

Use the following to answer question: -(Table: Consumer Surplus)Use Table: Consumer Surplus.Assume that each student wants to buy one ticket.If the price of a ticket to see The Nutty Nutcracker is $75,Lois's consumer surplus is:

The total producer surplus for a good CANNOT be calculated as the:

Use the following to answer question: -(Figure: Wireless Mouse Market)Look at the figure Wireless Mouse Market.Calculate the change in producer surplus when the price increases from $10 to $15.

Alex is willing to buy the last ticket to the Billy Bragg concert for $15,while Jake is willing to pay $25.Alex is first in line and buys a ticket for $15.He then resells his ticket to Jake for $20.By reselling the ticket instead of going to the concert himself,Alex caused:

Use the following to answer question: -(Figure: Producer Surplus)Look at the figure Producer Surplus.When the price falls from $45 to $35,producer surplus _ for a total producer surplus of _.

Peanut butter is an inferior good.If there is an increase in income,total surplus in the peanut butter market:

Use the following to answer question: -(Figure: The Gains from Trade)Look at the figure The Gains from Trade.What is the total surplus in this market when the demand curve is D₁and the market is in equilibrium?

Assuming that gasoline and cars are complements in consumption,if the price of gasoline rises,the producer surplus of auto manufacturers decreases.

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

Exam 4: Consumer and Producer Surplus

Total surplus is the excess of consumer surplus over producer surplus.

We can measure total producer surplus for good X as the:

Consumer surplus is represented by the area _____ the demand curve and _____ the price that the consumer pays.

An increase in the consumer surplus in the market for milkshakes may result from a(n)_____ in the _____ of milkshakes.

Use the following to answer question: -(Figure: Consumer and Producer Surplus)Look at the figure Consumer and Producer Surplus.An increase in supply will:

Which statement is TRUE concerning the relationship between efficiency and equity?

The total producer surplus in the Wisconsin milk market is the:

Use the following to answer question: -(Figure: Producer Surplus)Look at the figure Producer Surplus.When the price rises from $25 to $35,producer surplus _____ for a total producer surplus of _____.

If there is an increase in demand (parallel shift of demand to the right),assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus:

Use the following to answer question: -(Table: Consumer Surplus)Use Table: Consumer Surplus.Assume that each student wants to buy one ticket.If the price of a ticket to see The Nutty Nutcracker is $50,Lois's consumer surplus is:

Use the following to answer question: -(Table: Consumer Surplus)Use Table: Consumer Surplus.Assume that each student wants to buy one ticket.If the price of a ticket to see The Nutty Nutcracker is $75,Lois's consumer surplus is:

The total producer surplus for a good CANNOT be calculated as the:

Use the following to answer question: -(Figure: Wireless Mouse Market)Look at the figure Wireless Mouse Market.Calculate the change in producer surplus when the price increases from $10 to $15.

Alex is willing to buy the last ticket to the Billy Bragg concert for $15,while Jake is willing to pay $25.Alex is first in line and buys a ticket for $15.He then resells his ticket to Jake for $20.By reselling the ticket instead of going to the concert himself,Alex caused:

Use the following to answer question: -(Figure: Producer Surplus)Look at the figure Producer Surplus.When the price falls from $45 to $35,producer surplus _____ for a total producer surplus of _____.

Peanut butter is an inferior good.If there is an increase in income,total surplus in the peanut butter market:

Use the following to answer question: -(Figure: The Gains from Trade)Look at the figure The Gains from Trade.What is the total surplus in this market when the demand curve is D1 and the market is in equilibrium?

Assuming that gasoline and cars are complements in consumption,if the price of gasoline rises,the producer surplus of auto manufacturers decreases.

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

Consumer surplus is represented by the area _ the demand curve and _ the price that the consumer pays.

An increase in the consumer surplus in the market for milkshakes may result from a(n)_ in the _ of milkshakes.

Use the following to answer question: -(Figure: Producer Surplus)Look at the figure Producer Surplus.When the price rises from $25 to $35,producer surplus _ for a total producer surplus of _.

Use the following to answer question: -(Figure: Producer Surplus)Look at the figure Producer Surplus.When the price falls from $45 to $35,producer surplus _ for a total producer surplus of _.

Use the following to answer question: -(Figure: The Gains from Trade)Look at the figure The Gains from Trade.What is the total surplus in this market when the demand curve is D₁and the market is in equilibrium?