Question 1

Total surplus in a market is the number of extra consumers and producers that are not needed for the market to come to an equilibrium price and quantity.

Accepted Answer

A) True 
 B)False

Question 2

Christine has a linear demand curve for candy.If she wants to see her consumer surplus _____,she would like to see a(n)_____ in the market price of candy.

Accepted Answer

A) increase;decrease 
B) increase;increase 
C) decrease;decrease 
D) not change;decrease 
A) increase;decrease 
B) increase;increase 
C) decrease;decrease 
D) not change;decrease

Question 3

Along a given upward-sloping supply curve,a decrease in price will cause producer surplus to:

Accepted Answer

A) increase. 
B) decrease. 
C) stay the same. 
D) We cannot determine what producer surplus will do without information about the demand curve. 
A) increase. 
B) decrease. 
C) stay the same. 
D) We cannot determine what producer surplus will do without information about the demand curve.

Question 4

If the technology of producing peanuts improves,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 5

Use the following to answer question:  
-(Figure: Consumer Surplus II)Look at the figure Consumer Surplus II.If the price of the good increases from $3 to $4,consumer surplus will decrease by:

Accepted Answer

A) $5. 
B) $10. 
C) $15. 
D) $20. 
A) $5. 
B) $10. 
C) $15. 
D) $20.

Question 6

Prices are important economic signals because they convey information about how much producers are willing to pay for a good and how much it costs consumers to produce a good.

Accepted Answer

A) True 
 B)False

Question 7

Which scenario is most likely to INCREASE consumer surplus in the market for cotton T-shirts?

Accepted Answer

A) Weather provides for a bountiful cotton harvest. 
B) Consumer incomes fall and cotton T-shirts are normal goods. 
C) The price of polyester T-shirts falls. 
D) The price of industrial sewing machines used to produce garments increases. 
A) Weather provides for a bountiful cotton harvest. 
B) Consumer incomes fall and cotton T-shirts are normal goods. 
C) The price of polyester T-shirts falls. 
D) The price of industrial sewing machines used to produce garments increases.

Question 8

Producer surplus is represented by the area _____ the supply curve and _____ the price received by the seller.

Accepted Answer

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

Question 9

Use the following to answer question:  
-(Figure: Producer Surplus III)Look at the figure Producer Surplus III.If the price of the good increases from $3 to $4,producer surplus will increase by:

Accepted Answer

A) $5. 
B) $15. 
C) $25. 
D) $35. 
A) $5. 
B) $15. 
C) $25. 
D) $35.

Question 10

Adie wants to take some online classes this semester.She is willing to pay $1,000 for the first class,$800 for the second,$700 for the third,and $500 for the fourth.If online classes cost $750,Adie will take _____ online classes,and her consumer surplus will equal _____.

Accepted Answer

A) three;$350 
B) four;$600 
C) two;$400 
D) two;$300 
A) three;$350 
B) four;$600 
C) two;$400 
D) two;$300

Question 11

Suppose the equilibrium rent for apartments in Boston is $1,600.If the city of Boston imposes a price ceiling of $1,200,there will be a(n):

Accepted Answer

A) increase in producer surplus for each landlord. 
B) surplus of new apartments in Boston. 
C) increase in consumer surplus for Bostonians who can find apartments for $1,200. 
D) increase in total surplus. 
A) increase in producer surplus for each landlord. 
B) surplus of new apartments in Boston. 
C) increase in consumer surplus for Bostonians who can find apartments for $1,200. 
D) increase in total surplus.

Question 12

Use the following to answer question:  
-(Figure: Producer Surplus II)Look at the figure Producer Surplus II.At a price of P1,producer surplus equals the area:

Accepted Answer

A) LMK. 
B) P1K0. 
C) P2M0. 
D) P2P1KM. 
A) LMK. 
B) P1K0. 
C) P2M0. 
D) P2P1KM.

Question 13

Assume that the supply curve for corn is upward-sloping.In the market for corn,a primary input in the production of ethanol,total surplus _____ when the price of ethanol increases.

Accepted Answer

A) increases 
B) decreases 
C) does not change 
D) The answer cannot be determined without information about the supply curve. 
A) increases 
B) decreases 
C) does not change 
D) The answer cannot be determined without information about the supply curve.

Question 14

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 Andy consumes one more pumpkin and Ben consumes one fewer pumpkin than in equilibrium,total surplus will _____ by _____.

Accepted Answer

A) increase;$17 
B) increase;$15 
C) decrease;$8 
D) decrease;$3 
A) increase;$17 
B) increase;$15 
C) decrease;$8 
D) decrease;$3

Question 15

Use the following to answer question:  
-(Figure: The Market for Hamburgers)The figure The Market for Hamburgers shows the weekly market for hamburgers in Irvine,Kentucky.If 400 hamburgers are sold,producer surplus will equal:

Accepted Answer

A) $650. 
B) $400. 
C) $510. 
D) $200. 
A) $650. 
B) $400. 
C) $510. 
D) $200.

Question 16

Use the following to answer question:  
-(Figure: Producer Surplus II)Look at the figure Producer Surplus II.If the price falls from P2 to P1,producer surplus decreases by the area:

Accepted Answer

A) LMK. 
B) P1K0. 
C) P2M0. 
D) P2P1KM. 
A) LMK. 
B) P1K0. 
C) P2M0. 
D) P2P1KM.

Question 17

Total surplus is:

Accepted Answer

A) the difference between price and the cost to the seller. 
B) the sum of consumer and producer surplus. 
C) equal to the area below the demand curve. 
D) always more for consumers than producers. 
A) the difference between price and the cost to the seller. 
B) the sum of consumer and producer surplus. 
C) equal to the area below the demand curve. 
D) always more for consumers than producers.

Question 18

If property rights are restricted by government regulation,many more mutually beneficial transactions will occur.

Accepted Answer

A) True 
 B)False

Question 19

If the price is below the equilibrium price in the market for grapefruit,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus:

Accepted Answer

A) will be greater than if price were at equilibrium. 
B) will be less than if price were at equilibrium. 
C) will be the same as if price were at equilibrium. 
D) may be different than if price were at equilibrium,but we cannot determine this without more information. 
A) will be greater than if price were at equilibrium. 
B) will be less than if price were at equilibrium. 
C) will be the same as if price were at equilibrium. 
D) may be different than if price were at equilibrium,but we cannot determine this without more information.

Question 20

Well-defined property rights:

Accepted Answer

A) can allow for mutually beneficial trades. 
B) will result in government regulation. 
C) often result in more market failures. 
D) lead to more centralized decision making. 
A) can allow for mutually beneficial trades. 
B) will result in government regulation. 
C) often result in more market failures. 
D) lead to more centralized decision making.

Exam 4: Consumer and Producer Surplus

Total surplus in a market is the number of extra consumers and producers that are not needed for the market to come to an equilibrium price and quantity.

Christine has a linear demand curve for candy.If she wants to see her consumer surplus _____,she would like to see a(n)_____ in the market price of candy.

Along a given upward-sloping supply curve,a decrease in price will cause producer surplus to:

If the technology of producing peanuts improves,total surplus in the peanut butter market:

Use the following to answer question: -(Figure: Consumer Surplus II)Look at the figure Consumer Surplus II.If the price of the good increases from $3 to $4,consumer surplus will decrease by:

Prices are important economic signals because they convey information about how much producers are willing to pay for a good and how much it costs consumers to produce a good.

Which scenario is most likely to INCREASE consumer surplus in the market for cotton T-shirts?

Producer surplus is represented by the area _____ the supply curve and _____ the price received by the seller.

Use the following to answer question: -(Figure: Producer Surplus III)Look at the figure Producer Surplus III.If the price of the good increases from $3 to $4,producer surplus will increase by:

Adie wants to take some online classes this semester.She is willing to pay $1,000 for the first class,$800 for the second,$700 for the third,and $500 for the fourth.If online classes cost $750,Adie will take _____ online classes,and her consumer surplus will equal _____.

Suppose the equilibrium rent for apartments in Boston is $1,600.If the city of Boston imposes a price ceiling of $1,200,there will be a(n):

Use the following to answer question: -(Figure: Producer Surplus II)Look at the figure Producer Surplus II.At a price of P1,producer surplus equals the area:

Assume that the supply curve for corn is upward-sloping.In the market for corn,a primary input in the production of ethanol,total surplus _____ when the price of ethanol increases.

Use the following to answer question: -(Figure: The Market for Hamburgers)The figure The Market for Hamburgers shows the weekly market for hamburgers in Irvine,Kentucky.If 400 hamburgers are sold,producer surplus will equal:

Use the following to answer question: -(Figure: Producer Surplus II)Look at the figure Producer Surplus II.If the price falls from P2 to P1,producer surplus decreases by the area:

Total surplus is:

If property rights are restricted by government regulation,many more mutually beneficial transactions will occur.

If the price is below the equilibrium price in the market for grapefruit,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus:

Well-defined property rights:

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

Christine has a linear demand curve for candy.If she wants to see her consumer surplus _,she would like to see a(n)_ in the market price of candy.

Producer surplus is represented by the area _ the supply curve and _ the price received by the seller.

Adie wants to take some online classes this semester.She is willing to pay $1,000 for the first class,$800 for the second,$700 for the third,and $500 for the fourth.If online classes cost $750,Adie will take _ online classes,and her consumer surplus will equal _.

Use the following to answer question: -(Figure: Producer Surplus II)Look at the figure Producer Surplus II.At a price of P₁,producer surplus equals the area:

Use the following to answer question: -(Figure: Producer Surplus II)Look at the figure Producer Surplus II.If the price falls from P₂ to P₁,producer surplus decreases by the area: