Question 1

Suppose consumer income increases. If grass seed is a normal good, the equilibrium price of grass seed will

Accepted Answer

A) decrease, and producer surplus in the industry will decrease. 
B) increase, and producer surplus in the industry will increase. 
C) decrease, and producer surplus in the industry will increase. 
D) increase, and producer surplus in the industry will decrease. 
A) decrease, and producer surplus in the industry will decrease. 
B) increase, and producer surplus in the industry will increase. 
C) decrease, and producer surplus in the industry will increase. 
D) increase, and producer surplus in the industry will decrease.

Question 2

Jeff decides that he would pay as much as $2,000 for a new laptop computer. He buys the computer and realizes a consumer surplus of $300. How much did Jeff pay for his computer?

Accepted Answer

A) $300. 
B) $1,700. 
C) $2,000. 
D) $2,300. 
A) $300. 
B) $1,700. 
C) $2,000. 
D) $2,300.

Question 3

Table 7-15
The following table represents the costs of five possible sellers.  
-Refer to Table 7-15. If each producer has one unit available for sale, and if the market equilibrium price is $80 per unit, how much is the total producer surplus in this market?

Accepted Answer

A) $90 
B) $110 
C) $130 
D) $140 
A) $90 
B) $110 
C) $130 
D) $140

Question 4

Economists generally believe that, although there may be advantages to society from ticket-scalping, the costs to society of this activity outweigh the benefits.

Accepted Answer

A) True 
 B)False

Question 5

Table 7-18
The following table shows the cost of producing a good for the only four producers in a market.  
-Refer to Table 7-18. If the market price is $28, which producers will supply units in the market?

Accepted Answer

The answer of Table 7-18
The following table shows the cost...

Question 6

Figure 7-12  
-Refer to Figure 7-12. If the equilibrium price is $350, what is the producer surplus?

Accepted Answer

A) $60,000 
B) $15,000 
C) $30,000 
D) $70,000 
A) $60,000 
B) $15,000 
C) $30,000 
D) $70,000

Question 7

Figure 7-27  
-Refer to Figure 7-27. Buyers who value this good more than the equilibrium price are represented by which line segment?

Accepted Answer

A) AC. 
B) CK. 
C) BC. 
D) CH. 
A) AC. 
B) CK. 
C) BC. 
D) CH.

Question 8

In order to conclude that markets are efficient, we assume that they are perfectly competitive.

Accepted Answer

A) True 
 B)False

Question 9

Table 7-14  
-Refer to Table 7-14. You want to hire a professional photographer to take pictures of your family. The table shows the costs of the four potential sellers in the local photography market. You take bids from the sellers. Who offers the winning bid, and what does he offer to charge for the photography session?

Accepted Answer

A) Steve; more than $400 but less than $450 
B) Steve; $399 
C) LeBron; more than $700 
D) LeBron; more than $600 but less than $700 
A) Steve; more than $400 but less than $450 
B) Steve; $399 
C) LeBron; more than $700 
D) LeBron; more than $600 but less than $700

Question 10

Table 7-18
The following table shows the cost of producing a good for the only four producers in a market.  
-Refer to Table 7-18. If these four producers bid in an auction to supply one unit to a consumer, at what price will the good be sold?

Accepted Answer

The good w

Question 11

Figure 7-19  
-Refer to Figure 7-19. At the equilibrium price, consumer surplus is

Accepted Answer

A) $100. 
B) $200. 
C) $50. 
D) $450. 
A) $100. 
B) $200. 
C) $50. 
D) $450.

Question 12

Figure 7-22  
-Refer to Figure 7-22. The efficient price is

Accepted Answer

A) $80, and the efficient quantity is 50. 
B) $70, and the efficient quantity is 60. 
C) $70, and the efficient quantity is 100. 
D) $50, and the efficient quantity is 60. 
A) $80, and the efficient quantity is 50. 
B) $70, and the efficient quantity is 60. 
C) $70, and the efficient quantity is 100. 
D) $50, and the efficient quantity is 60.

Question 13

Let P represent price; let QS represent quantity supplied; and assume the equation of the supply curve is   . If 90 units of the good are produced and sold, then producer surplus amounts to $1,350.

Accepted Answer

A) True 
 B)False

Question 14

Ronnie operates a lawn-care service. On each day, the cost of mowing the first lawn is $15, the cost of mowing the second lawn is $25, and the cost of mowing the third lawn is $40. His producer surplus on the first three lawns of the day is $100. If Ronnie charges all customers the same price for lawn mowing, that price is

Accepted Answer

A) $20. 
B) $60. 
C) $80. 
D) $180. 
A) $20. 
B) $60. 
C) $80. 
D) $180.

Question 15

Welfare economics is the study of how

Accepted Answer

A) the allocation of resources affects economic well-being. 
B) a price ceiling compares to a price floor. 
C) the government helps poor people. 
D) a consumer's optimal choice affects her demand curve. 
A) the allocation of resources affects economic well-being. 
B) a price ceiling compares to a price floor. 
C) the government helps poor people. 
D) a consumer's optimal choice affects her demand curve.

Question 16

In a competitive market, sales go to those producers who are willing to supply the product at the lowest price.

Accepted Answer

A) True 
 B)False

Question 17

If the government removes a binding price ceiling in a market, then the producer surplus in that market will increase.

Accepted Answer

A) True 
 B)False

Question 18

Celine buys a new MP3 player for $90. She receives consumer surplus of $15 on her purchase if her willingness to pay is

Accepted Answer

A) $15. 
B) $90. 
C) $105. 
D) $75. 
A) $15. 
B) $90. 
C) $105. 
D) $75.

Question 19

Producer surplus is

Accepted Answer

A) represented on a graph by the area below the demand curve and above the supply curve. 
B) the amount a seller is paid minus the cost of production. 
C) also referred to as excess supply. 
D) All of the above are correct. 
A) represented on a graph by the area below the demand curve and above the supply curve. 
B) the amount a seller is paid minus the cost of production. 
C) also referred to as excess supply. 
D) All of the above are correct.

Question 20

Figure 7-14  
-Refer to Figure 7-14. At the equilibrium price, producer surplus is

Accepted Answer

A) $800. 
B) $400. 
C) $450. 
D) $900. 
A) $800. 
B) $400. 
C) $450. 
D) $900.

Suppose consumer income increases. If grass seed is a normal good, the equilibrium price of grass seed will

Jeff decides that he would pay as much as $2,000 for a new laptop computer. He buys the computer and realizes a consumer surplus of $300. How much did Jeff pay for his computer?

Table 7-15 The following table represents the costs of five possible sellers. -Refer to Table 7-15. If each producer has one unit available for sale, and if the market equilibrium price is $80 per unit, how much is the total producer surplus in this market?

Economists generally believe that, although there may be advantages to society from ticket-scalping, the costs to society of this activity outweigh the benefits.

Table 7-18 The following table shows the cost of producing a good for the only four producers in a market. -Refer to Table 7-18. If the market price is $28, which producers will supply units in the market?

Figure 7-12 -Refer to Figure 7-12. If the equilibrium price is $350, what is the producer surplus?

Figure 7-27 -Refer to Figure 7-27. Buyers who value this good more than the equilibrium price are represented by which line segment?

In order to conclude that markets are efficient, we assume that they are perfectly competitive.

Table 7-18 The following table shows the cost of producing a good for the only four producers in a market. -Refer to Table 7-18. If these four producers bid in an auction to supply one unit to a consumer, at what price will the good be sold?

Figure 7-19 -Refer to Figure 7-19. At the equilibrium price, consumer surplus is

Figure 7-22 -Refer to Figure 7-22. The efficient price is

Let P represent price; let QS represent quantity supplied; and assume the equation of the supply curve is . If 90 units of the good are produced and sold, then producer surplus amounts to $1,350.

Welfare economics is the study of how

In a competitive market, sales go to those producers who are willing to supply the product at the lowest price.

If the government removes a binding price ceiling in a market, then the producer surplus in that market will increase.

Celine buys a new MP3 player for $90. She receives consumer surplus of $15 on her purchase if her willingness to pay is

Producer surplus is

Figure 7-14 -Refer to Figure 7-14. At the equilibrium price, producer surplus is

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Filters

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

Suppose consumer income increases. If grass seed is a normal good, the equilibrium price of grass seed will

Jeff decides that he would pay as much as $2,000 for a new laptop computer. He buys the computer and realizes a consumer surplus of $300. How much did Jeff pay for his computer?

Table 7-15 The following table represents the costs of five possible sellers. -Refer to Table 7-15. If each producer has one unit available for sale, and if the market equilibrium price is $80 per unit, how much is the total producer surplus in this market?

Economists generally believe that, although there may be advantages to society from ticket-scalping, the costs to society of this activity outweigh the benefits.

Table 7-18 The following table shows the cost of producing a good for the only four producers in a market. -Refer to Table 7-18. If the market price is $28, which producers will supply units in the market?

Figure 7-12 -Refer to Figure 7-12. If the equilibrium price is $350, what is the producer surplus?

Figure 7-27 -Refer to Figure 7-27. Buyers who value this good more than the equilibrium price are represented by which line segment?

In order to conclude that markets are efficient, we assume that they are perfectly competitive.

Table 7-18 The following table shows the cost of producing a good for the only four producers in a market. -Refer to Table 7-18. If these four producers bid in an auction to supply one unit to a consumer, at what price will the good be sold?

Figure 7-19 -Refer to Figure 7-19. At the equilibrium price, consumer surplus is

Figure 7-22 -Refer to Figure 7-22. The efficient price is

Let P represent price; let QS represent quantity supplied; and assume the equation of the supply curve is . If 90 units of the good are produced and sold, then producer surplus amounts to $1,350.

Welfare economics is the study of how

In a competitive market, sales go to those producers who are willing to supply the product at the lowest price.

If the government removes a binding price ceiling in a market, then the producer surplus in that market will increase.

Celine buys a new MP3 player for $90. She receives consumer surplus of $15 on her purchase if her willingness to pay is

Producer surplus is

Figure 7-14 -Refer to Figure 7-14. At the equilibrium price, producer surplus is

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Filters