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

Michael values a stainless steel refrigerator for his new house at $3,500, but he succeeds in buying one for $3,000. Michael's willingness to pay is

Figure 7-30 -Refer to Figure 7-30. If the market equilibrium price falls from $120 to $80, how much is the change in total consumer surplus in the market?

Figure 7-18 -Refer to Figure 7-18. Suppose the willingness to pay of the marginal buyer of the 3^rd unit is $125. Then total surplus is maximized if

Henry is willing to pay 45 cents, and Janine is willing to pay 55 cents, for 1 pound of bananas. When the price of bananas falls from 50 cents a pound to 40 cents a pound,

Table 7-15 The following table represents the costs of five possible sellers. -Refer to Table 7-15. Suppose each of the five sellers can supply at most one unit of the good. At which of the following prices would the market quantity supplied be exactly three units?

We can say that the allocation of resources is efficient if

Table 7-1 -Refer to Table 7-1. If the price of the product is $110, then who would be willing to purchase the product?

Figure 7-16 -Refer to Figure 7-16. Suppose the price of the good is $450. Then, on the first unit of the good that is sold, producer surplus is

Figure 7-15 -Refer to Figure 7-15. When the price rises from P1 to P2, what area represents the increase in producer surplus?

Moving production from a high-cost producer to a low-cost producer will

Figure 7-11 -Refer to Figure 7-11. If the supply curve is S and the demand curve shifts from D to D', what is the change in producer surplus?

Figure 7-22 -Refer to Figure 7-22. At the equilibrium price, consumer surplus is

Table 7-13 The only four producers in a market have the following costs: -Refer to Table 7-13. If the sellers bid against each other for the right to sell the good to a single consumer, then the good will sell for

Figure 7-33 -Refer to Figure 7-33. How much is total consumer surplus in this market at the equilibrium price?

Given the following two equations: 1) Total Surplus = Consumer Surplus + Producer Surplus 2) Total Surplus = Value to Buyers - Cost to Sellers Show how equation (1) can be used to derive equation (2).

Producer surplus directly measures

Economists tend to see ticket scalping as

Figure 7-21 -Refer to Figure 7-21. Which area represents consumer surplus when the price is P1?

Table 7-17 The following table shows the willingness to pay for a good for the only four consumers in a market. -Refer to Table 7-17. If the price of the good is $20, how much is the total consumer surplus?

Which of the following will cause an increase in producer surplus?