Question 1

If the cost of soybeans (the major ingredient in tofu)decreases,consumer surplus in the market for tofu will decrease.

Accepted Answer

A) True 
 B)False

Question 2

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:

Accepted Answer

A) $12. 
B) $10. 
C) $8. 
D) $6. 
A) $12. 
B) $10. 
C) $8. 
D) $6.

Question 3

Externalities occur when the welfare of others not involved in the production or consumption of a good or service are affected in ways that markets don't take into account on their own.

Accepted Answer

A) True 
 B)False

Question 4

Along the upward-sloping supply curve for brownies,a decrease in the price of brownies will:

Accepted Answer

A) increase producer surplus. 
B) decrease producer surplus. 
C) increase consumer surplus. 
D) increase producer surplus and consumer surplus. 
A) increase producer surplus. 
B) decrease producer surplus. 
C) increase consumer surplus. 
D) increase producer surplus and consumer surplus.

Question 5

Consumer surplus for a given good can be found by computing the area _____ the _____ curve and _____ the price paid for the good.

Accepted Answer

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

Question 6

If the supply curve of ice cream is upward-sloping and demand for it decreases,there will be _____ in producer surplus.

Accepted Answer

A) an increase 
B) a decrease 
C) no change 
D) It's impossible to tell what will happen to producer surplus. 
A) an increase 
B) a decrease 
C) no change 
D) It's impossible to tell what will happen to producer surplus.

Question 7

The total consumer surplus for good X CANNOT be calculated as the:

Accepted Answer

A) sum of the individual consumer surpluses for all buyers of X. 
B) area below the demand curve for X and above the price paid for X. 
C) area bounded by the demand curve for X and the two axes. 
D) sum,for all buyers of X,of the difference between what each buyer is willing to pay for X and the amount actually paid. 
A) sum of the individual consumer surpluses for all buyers of X. 
B) area below the demand curve for X and above the price paid for X. 
C) area bounded by the demand curve for X and the two axes. 
D) sum,for all buyers of X,of the difference between what each buyer is willing to pay for X and the amount actually paid.

Question 8

Consumers' willingness to pay for a good is used to derive the _____ for that good.

Accepted Answer

A) producer surplus 
B) cost of production 
C) supply curve 
D) demand curve 
A) producer surplus 
B) cost of production 
C) supply curve 
D) demand curve

Question 9

Use the following to answer question:  
-(Table: Firm's Willingness)The table Firm's Willingness explains the relation between the number of reports a firm is willing to produce and the lowest price it is willing to accept to prepare those reports.If the price of a report is $12,what is the value of producer surplus for the firm?

Accepted Answer

A) $27 
B) $21 
C) $16 
D) $42 
A) $27 
B) $21 
C) $16 
D) $42

Question 10

Suppose the market demand for TV remotes is given by the equation Qd = 100 - 2P,where P is the price and Qd is the number of TV remotes.If the market price of TV remotes is $40,then the quantity demanded equals _____ and the value of consumer surplus is _____.

Accepted Answer

A) 20;$100 
B) 100;$20 
C) 40;$200 
D) 2;$40 
A) 20;$100 
B) 100;$20 
C) 40;$200 
D) 2;$40

Question 11

Vonda and Aleiyah are shopping together at the mall for new jeans.Vonda is willing to pay $90 and Aleiyah is willing to pay $50 for a pair of jeans.If the price of jeans is $59,how much total consumer surplus is achieved in this market?

Accepted Answer

A) $0 
B) $9 
C) $31 
D) $40 
A) $0 
B) $9 
C) $31 
D) $40

Question 12

The number of seats in a football stadium is fixed at 70,000.The team raises the price of a ticket from $30,at which 70,000 are sold,to $40,and it sells 60,000 tickets.The price change caused a change in the consumer surplus of:

Accepted Answer

A) -$10. 
B) -$650,000. 
C) -$100,000. 
D) -$10,000. 
A) -$10. 
B) -$650,000. 
C) -$100,000. 
D) -$10,000.

Question 13

Use the following to answer question:  
-(Figure: A Market in Equilibrium)Look at the figure A Market in Equilibrium.At the equilibrium price,this market's consumer surplus is equal to the area:

Accepted Answer

A) ABC. 
B) ADI. 
C) DIF. 
D) EHF. 
A) ABC. 
B) ADI. 
C) DIF. 
D) EHF.

Question 14

Which factor is key in the effectiveness of well-functioning markets?

Accepted Answer

A) outcomes that are equitable for consumers and producers 
B) the role of the government to deliver economic signals to consumers and producers 
C) a significant degree of government intervention to maximize efficiency 
D) your right to use and dispose of your private property as you see fit 
A) outcomes that are equitable for consumers and producers 
B) the role of the government to deliver economic signals to consumers and producers 
C) a significant degree of government intervention to maximize efficiency 
D) your right to use and dispose of your private property as you see fit

Question 15

Use the following to answer question:  
-(Figure: Gain in Consumer Surplus)Look at the figure Gain in Consumer Surplus.Identify the area or areas that represent the total change in consumer surplus when the price falls from P1 to P2.

Accepted Answer

A) A and B 
B) B and C 
C) D and E 
D) A,B,and C 
A) A and B 
B) B and C 
C) D and E 
D) A,B,and C

Question 16

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 the price of burgers falls from $1.50 to $1.00,there is a loss in producer surplus.How much of the loss accrues as a direct result of the hamburgers that are no longer supplied in the market?

Accepted Answer

A) $50 
B) $45 
C) $75 
D) $90 
A) $50 
B) $45 
C) $75 
D) $90

Question 17

A consumer's willingness to pay reflects the:

Accepted Answer

A) maximum price at which he or she would buy a given good or service. 
B) minimum price at which he or she would buy a given good or service. 
C) cost of producing a given good or service. 
D) equilibrium price of a given good or service. 
A) maximum price at which he or she would buy a given good or service. 
B) minimum price at which he or she would buy a given good or service. 
C) cost of producing a given good or service. 
D) equilibrium price of a given good or service.

Question 18

Market failure occurs when a market fails to produce efficient outcomes for society.

Accepted Answer

A) True 
 B)False

Question 19

Mountain River Adventures offers whitewater rafting trips down the Colorado River.It costs the firm $100 for the first raft trip per day,$120 for the second,$140 for the third,and $160 for the fourth.If the market price for a raft trip is $150,Mountain River Adventures will offer _____ trips per day and will have producer surplus equal to _____ per day.

Accepted Answer

A) three;$90 
B) three;$10 
C) two;$220 
D) four;$80 
A) three;$90 
B) three;$10 
C) two;$220 
D) four;$80

Question 20

If the market for concert tickets is in equilibrium and the fire marshal tries to reduce the number of tickets sold,all other things equal,total surplus will decrease.

Accepted Answer

A) True 
 B)False

If the cost of soybeans (the major ingredient in tofu)decreases,consumer surplus in the market for tofu will decrease.

Externalities occur when the welfare of others not involved in the production or consumption of a good or service are affected in ways that markets don't take into account on their own.

Along the upward-sloping supply curve for brownies,a decrease in the price of brownies will:

Consumer surplus for a given good can be found by computing the area ___ the _ curve and ___ the price paid for the good.

If the supply curve of ice cream is upward-sloping and demand for it decreases,there will be _____ in producer surplus.

The total consumer surplus for good X CANNOT be calculated as the:

Consumers' willingness to pay for a good is used to derive the _____ for that good.

Suppose the market demand for TV remotes is given by the equation Q_d = 100 - 2P,where P is the price and Q_d is the number of TV remotes.If the market price of TV remotes is $40,then the quantity demanded equals _ and the value of consumer surplus is _.

Vonda and Aleiyah are shopping together at the mall for new jeans.Vonda is willing to pay $90 and Aleiyah is willing to pay $50 for a pair of jeans.If the price of jeans is $59,how much total consumer surplus is achieved in this market?

The number of seats in a football stadium is fixed at 70,000.The team raises the price of a ticket from $30,at which 70,000 are sold,to $40,and it sells 60,000 tickets.The price change caused a change in the consumer surplus of:

Use the following to answer question: -(Figure: A Market in Equilibrium)Look at the figure A Market in Equilibrium.At the equilibrium price,this market's consumer surplus is equal to the area:

Which factor is key in the effectiveness of well-functioning markets?

Use the following to answer question: -(Figure: Gain in Consumer Surplus)Look at the figure Gain in Consumer Surplus.Identify the area or areas that represent the total change in consumer surplus when the price falls from P₁ to P₂.

A consumer's willingness to pay reflects the:

Market failure occurs when a market fails to produce efficient outcomes for society.

If the market for concert tickets is in equilibrium and the fire marshal tries to reduce the number of tickets sold,all other things equal,total surplus will decrease.

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

If the cost of soybeans (the major ingredient in tofu)decreases,consumer surplus in the market for tofu will decrease.

Externalities occur when the welfare of others not involved in the production or consumption of a good or service are affected in ways that markets don't take into account on their own.

Along the upward-sloping supply curve for brownies,a decrease in the price of brownies will:

Consumer surplus for a given good can be found by computing the area _____ the _____ curve and _____ the price paid for the good.

If the supply curve of ice cream is upward-sloping and demand for it decreases,there will be _____ in producer surplus.

The total consumer surplus for good X CANNOT be calculated as the:

Consumers' willingness to pay for a good is used to derive the _____ for that good.

Suppose the market demand for TV remotes is given by the equation Qd = 100 - 2P,where P is the price and Qd is the number of TV remotes.If the market price of TV remotes is $40,then the quantity demanded equals _____ and the value of consumer surplus is _____.

Vonda and Aleiyah are shopping together at the mall for new jeans.Vonda is willing to pay $90 and Aleiyah is willing to pay $50 for a pair of jeans.If the price of jeans is $59,how much total consumer surplus is achieved in this market?

The number of seats in a football stadium is fixed at 70,000.The team raises the price of a ticket from $30,at which 70,000 are sold,to $40,and it sells 60,000 tickets.The price change caused a change in the consumer surplus of:

Use the following to answer question: -(Figure: A Market in Equilibrium)Look at the figure A Market in Equilibrium.At the equilibrium price,this market's consumer surplus is equal to the area:

Which factor is key in the effectiveness of well-functioning markets?

Use the following to answer question: -(Figure: Gain in Consumer Surplus)Look at the figure Gain in Consumer Surplus.Identify the area or areas that represent the total change in consumer surplus when the price falls from P1 to P2.

A consumer's willingness to pay reflects the:

Market failure occurs when a market fails to produce efficient outcomes for society.

If the market for concert tickets is in equilibrium and the fire marshal tries to reduce the number of tickets sold,all other things equal,total surplus will decrease.

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 for a given good can be found by computing the area ___ the _ curve and ___ the price paid for the good.

Suppose the market demand for TV remotes is given by the equation Q_d = 100 - 2P,where P is the price and Q_d is the number of TV remotes.If the market price of TV remotes is $40,then the quantity demanded equals _ and the value of consumer surplus is _.

Use the following to answer question: -(Figure: Gain in Consumer Surplus)Look at the figure Gain in Consumer Surplus.Identify the area or areas that represent the total change in consumer surplus when the price falls from P₁ to P₂.