Question 1

Total surplus in a market is the excess of the number of consumers above the optimum number.

Accepted Answer

A) True 
 B)False

Question 2

When there is a positive amount of total surplus in a market,it means that the cost of producing the good is zero.

Accepted Answer

A) True 
 B)False

Question 3

If total surplus rises,there may have been a(n)_____ in demand or a(n)_____ in supply.

Accepted Answer

A) increase;decrease 
B) increase;increase 
C) decrease;decrease 
D) decrease;increase 
A) increase;decrease 
B) increase;increase 
C) decrease;decrease 
D) decrease;increase

Question 4

Maria wants to get rid of her bookshelf.She is willing to give it away,but her neighbor offers to pay $30 for it.Maria takes a:

Accepted Answer

A) consumer surplus gain. 
B) consumer surplus loss. 
C) producer surplus gain. 
D) producer surplus loss. 
A) consumer surplus gain. 
B) consumer surplus loss. 
C) producer surplus gain. 
D) producer surplus loss.

Question 5

Property rights benefit sellers of goods much more than they benefit consumers.

Accepted Answer

A) True 
 B)False

Question 6

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 gain in consumer surplus to consumers already participating in the market when the price falls from P1 to P2.

Accepted Answer

A) A and B 
B) B 
C) B and C 
D) C 
A) A and B 
B) B 
C) B and C 
D) C

Question 7

Along a straight-line downward-sloping demand curve,a decrease in the market price of a good:

Accepted Answer

A) will cause no change in consumer surplus. 
B) will increase consumer surplus. 
C) will decrease consumer surplus. 
D) may either decrease or increase consumer surplus. 
A) will cause no change in consumer surplus. 
B) will increase consumer surplus. 
C) will decrease consumer surplus. 
D) may either decrease or increase consumer surplus.

Question 8

A price below the equilibrium price will cause a reduction in consumer surplus.

Accepted Answer

A) True 
 B)False

Question 9

Use the following to answer question:  
-(Figure: Wireless Mouse Market)Look at the figure Wireless Mouse Market.Calculate producer surplus when the market is in equilibrium.

Accepted Answer

A) $4,000 
B) $2,000 
C) $8,000 
D) $1,000 
A) $4,000 
B) $2,000 
C) $8,000 
D) $1,000

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 $99,how many pairs will be purchased?

Accepted Answer

A) one 
B) two 
C) three 
D) four 
A) one 
B) two 
C) three 
D) four

Question 11

Along a given upward-sloping supply curve,a decrease in the price of a good will _____ producer surplus.

Accepted Answer

A) increase 
B) decrease 
C) have no effect on 
D) It's impossible to tell what will happen to producer surplus. 
A) increase 
B) decrease 
C) have no effect on 
D) It's impossible to tell what will happen to producer surplus.

Question 12

Efficiency addresses the best way to achieve a goal once it has been determined.

Accepted Answer

A) True 
 B)False

Question 13

A factor that is NOT a possible reason for market failure is:

Accepted Answer

A) firms having too much market power. 
B) externalities. 
C) public goods. 
D) extremely high prices for medical care. 
A) firms having too much market power. 
B) externalities. 
C) public goods. 
D) extremely high prices for medical care.

Question 14

Use the following to answer question:  
-(Table: Producer Surplus)Use Table: Producer Surplus.If the tickets to The Nutty Nutcracker are free and there is no other market for tickets,the total producer surplus for the five students is:

Accepted Answer

A) $276. 
B) $100. 
C) $74. 
D) $0. 
A) $276. 
B) $100. 
C) $74. 
D) $0.

Question 15

(Figure: Producer Surplus and Supply)Look at the figure Producer Surplus and Supply.The difference between the total revenue received by sellers and their total cost is called _____,which is depicted by area _____ if the amount sold is E.

Accepted Answer

A) consumer surplus;ABD 
B) producer surplus;0BDE 
C) profit;ABD 
D) producer surplus;ABD 
A) consumer surplus;ABD 
B) producer surplus;0BDE 
C) profit;ABD 
D) producer surplus;ABD

Question 16

A consumer's willingness to pay for a surfboard is the minimum price at which he or she would buy the surfboard.

Accepted Answer

A) True 
 B)False

Question 17

Market failure refers to a situation in which:

Accepted Answer

A) markets fail to reach a fair outcome. 
B) markets establish a high price for necessities. 
C) market-determined wages are not high enough to raise all workers above the poverty line. 
D) markets fail to reach an efficient outcome. 
A) markets fail to reach a fair outcome. 
B) markets establish a high price for necessities. 
C) market-determined wages are not high enough to raise all workers above the poverty line. 
D) markets fail to reach an efficient outcome.

Question 18

Coffee and tea are substitutes in consumption.If there is an increase in the price of coffee,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus in the tea 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 19

Use the following to answer question:  
-(Table: Producer Surplus and Phantom Tickets)The table Producer Surplus and Phantom Tickets shows the minimum price at which each of the students is willing to sell a ticket to Phantom of the Opera.Assume that each student has only one ticket to sell.If the price for Phantom tickets is $55,which student has the highest individual producer surplus?

Accepted Answer

A) Tim 
B) Laura 
C) Rick 
D) Ralph 
A) Tim 
B) Laura 
C) Rick 
D) Ralph

Question 20

(Figure: Monthly Demand for Ice Cream Cones)The graph Monthly Demand for Ice Cream Cones shows one individual's linear monthly demand for ice cream cones.At $5 per cone,this individual will consume 10 cones in a month.How much consumer surplus does this consumer receive?

Accepted Answer

A) $100 
B) $50 
C) $150 
D) $500 
A) $100 
B) $50 
C) $150 
D) $500

Total surplus in a market is the excess of the number of consumers above the optimum number.

When there is a positive amount of total surplus in a market,it means that the cost of producing the good is zero.

If total surplus rises,there may have been a(n)_ in demand or a(n)_ in supply.

Maria wants to get rid of her bookshelf.She is willing to give it away,but her neighbor offers to pay $30 for it.Maria takes a:

Property rights benefit sellers of goods much more than they benefit consumers.

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 gain in consumer surplus to consumers already participating in the market when the price falls from P₁ to P₂.

Along a straight-line downward-sloping demand curve,a decrease in the market price of a good:

A price below the equilibrium price will cause a reduction in consumer surplus.

Use the following to answer question: -(Figure: Wireless Mouse Market)Look at the figure Wireless Mouse Market.Calculate producer surplus when the market is in equilibrium.

Along a given upward-sloping supply curve,a decrease in the price of a good will _____ producer surplus.

Efficiency addresses the best way to achieve a goal once it has been determined.

A factor that is NOT a possible reason for market failure is:

Use the following to answer question: -(Table: Producer Surplus)Use Table: Producer Surplus.If the tickets to The Nutty Nutcracker are free and there is no other market for tickets,the total producer surplus for the five students is:

(Figure: Producer Surplus and Supply)Look at the figure Producer Surplus and Supply.The difference between the total revenue received by sellers and their total cost is called _,which is depicted by area _ if the amount sold is E.

A consumer's willingness to pay for a surfboard is the minimum price at which he or she would buy the surfboard.

Market failure refers to a situation in which:

Coffee and tea are substitutes in consumption.If there is an increase in the price of coffee,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus in the tea market:

(Figure: Monthly Demand for Ice Cream Cones)The graph Monthly Demand for Ice Cream Cones shows one individual's linear monthly demand for ice cream cones.At $5 per cone,this individual will consume 10 cones in a month.How much consumer surplus does this consumer receive?

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 in a market is the excess of the number of consumers above the optimum number.

When there is a positive amount of total surplus in a market,it means that the cost of producing the good is zero.

If total surplus rises,there may have been a(n)_____ in demand or a(n)_____ in supply.

Maria wants to get rid of her bookshelf.She is willing to give it away,but her neighbor offers to pay $30 for it.Maria takes a:

Property rights benefit sellers of goods much more than they benefit consumers.

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 gain in consumer surplus to consumers already participating in the market when the price falls from P1 to P2.

Along a straight-line downward-sloping demand curve,a decrease in the market price of a good:

A price below the equilibrium price will cause a reduction in consumer surplus.

Use the following to answer question: -(Figure: Wireless Mouse Market)Look at the figure Wireless Mouse Market.Calculate producer surplus when the market is in equilibrium.

Along a given upward-sloping supply curve,a decrease in the price of a good will _____ producer surplus.

Efficiency addresses the best way to achieve a goal once it has been determined.

A factor that is NOT a possible reason for market failure is:

Use the following to answer question: -(Table: Producer Surplus)Use Table: Producer Surplus.If the tickets to The Nutty Nutcracker are free and there is no other market for tickets,the total producer surplus for the five students is:

(Figure: Producer Surplus and Supply)Look at the figure Producer Surplus and Supply.The difference between the total revenue received by sellers and their total cost is called _____,which is depicted by area _____ if the amount sold is E.

A consumer's willingness to pay for a surfboard is the minimum price at which he or she would buy the surfboard.

Market failure refers to a situation in which:

Coffee and tea are substitutes in consumption.If there is an increase in the price of coffee,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus in the tea market:

(Figure: Monthly Demand for Ice Cream Cones)The graph Monthly Demand for Ice Cream Cones shows one individual's linear monthly demand for ice cream cones.At $5 per cone,this individual will consume 10 cones in a month.How much consumer surplus does this consumer receive?

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

If total surplus rises,there may have been a(n)_ in demand or a(n)_ in supply.

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 gain in consumer surplus to consumers already participating in the market when the price falls from P₁ to P₂.

(Figure: Producer Surplus and Supply)Look at the figure Producer Surplus and Supply.The difference between the total revenue received by sellers and their total cost is called _,which is depicted by area _ if the amount sold is E.