Question 1

Figure 7-22  
-Refer to Figure 7-22. If the price decreases from $80 to $70 due to a shift in the supply curve, consumer surplus increases by

Accepted Answer

A) $250. 
B) $750. 
C) $1000. 
D) $500. 
A) $250. 
B) $750. 
C) $1000. 
D) $500.

Question 2

At Nick's Bakery, the cost to make homemade chocolate cake is $4 per cake. As a result of selling five cakes, Nick experiences a producer surplus in the amount of $17.50. Nick must be selling his cakes for

Accepted Answer

A) $6.50 each. 
B) $7.50 each. 
C) $9.50 each. 
D) $10.50 each. 
A) $6.50 each. 
B) $7.50 each. 
C) $9.50 each. 
D) $10.50 each.

Question 3

ABC Company incurs a cost of 50 cents to produce a dozen eggs, while XYZ Company incurs a cost of 70 cents to produce a dozen eggs. Which of the following price increases would cause both companies to experience an increase in producer surplus?

Accepted Answer

A) The price of a dozen eggs increases from 40 cents to 55 cents. 
B) The price of a dozen eggs increases from 55 cents to 70 cents. 
C) The price of a dozen eggs increases from 55 cents to 75 cents. 
D) All of these price increases would cause both companies to experience a loss in producer surplus. 
A) The price of a dozen eggs increases from 40 cents to 55 cents. 
B) The price of a dozen eggs increases from 55 cents to 70 cents. 
C) The price of a dozen eggs increases from 55 cents to 75 cents. 
D) All of these price increases would cause both companies to experience a loss in producer surplus.

Question 4

Which of the following is correct?

Accepted Answer

A) Consumer surplus refers to a situation in which there are more buyers than sellers in a market. 
B) Producer surplus refers to a situation in which there are more sellers than buyers in a market. 
C) Total surplus is measured as the area below the demand curve and above the supply curve, up to the equilibrium quantity. 
D) All of the above are correct. 
A) Consumer surplus refers to a situation in which there are more buyers than sellers in a market. 
B) Producer surplus refers to a situation in which there are more sellers than buyers in a market. 
C) Total surplus is measured as the area below the demand curve and above the supply curve, up to the equilibrium quantity. 
D) All of the above are correct.

Question 5

Table 7-5
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day.  
-Refer to Table 7-5. If the market price of an orange increases from $0.70 to $1.40, then consumer surplus

Accepted Answer

A) increases by $2.60. 
B) decreases by $0.70. 
C) decreases by $2.50. 
D) decreases by $2.60. 
A) increases by $2.60. 
B) decreases by $0.70. 
C) decreases by $2.50. 
D) decreases by $2.60.

Question 6

Dawn's bridal boutique is having a sale on evening dresses. The increase in consumer surplus comes from the benefit of the lower prices to

Accepted Answer

A) only existing customers who now get lower prices on the gowns they were already planning to purchase. 
B) only new customers who enter the market because of the lower prices. 
C) both existing customers who now get lower prices on the gowns they were already planning to purchase and new customers who enter the market because of the lower prices. 
D) Consumer surplus does not increase; it decreases. 
A) only existing customers who now get lower prices on the gowns they were already planning to purchase. 
B) only new customers who enter the market because of the lower prices. 
C) both existing customers who now get lower prices on the gowns they were already planning to purchase and new customers who enter the market because of the lower prices. 
D) Consumer surplus does not increase; it decreases.

Question 7

Table 7-16  
-Refer to Table 7-16. Both the demand curve and the supply curve are straight lines. At equilibrium, producer surplus is

Accepted Answer

A) $24. 
B) $32. 
C) $48. 
D) $64. 
A) $24. 
B) $32. 
C) $48. 
D) $64.

Figure 7-22 -Refer to Figure 7-22. If the price decreases from $80 to $70 due to a shift in the supply curve, consumer surplus increases by

At Nick's Bakery, the cost to make homemade chocolate cake is $4 per cake. As a result of selling five cakes, Nick experiences a producer surplus in the amount of $17.50. Nick must be selling his cakes for

ABC Company incurs a cost of 50 cents to produce a dozen eggs, while XYZ Company incurs a cost of 70 cents to produce a dozen eggs. Which of the following price increases would cause both companies to experience an increase in producer surplus?

Which of the following is correct?

Dawn's bridal boutique is having a sale on evening dresses. The increase in consumer surplus comes from the benefit of the lower prices to

Table 7-16 -Refer to Table 7-16. Both the demand curve and the supply curve are straight lines. At equilibrium, 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

Figure 7-22 -Refer to Figure 7-22. If the price decreases from $80 to $70 due to a shift in the supply curve, consumer surplus increases by

At Nick's Bakery, the cost to make homemade chocolate cake is $4 per cake. As a result of selling five cakes, Nick experiences a producer surplus in the amount of $17.50. Nick must be selling his cakes for

ABC Company incurs a cost of 50 cents to produce a dozen eggs, while XYZ Company incurs a cost of 70 cents to produce a dozen eggs. Which of the following price increases would cause both companies to experience an increase in producer surplus?

Which of the following is correct?

Dawn's bridal boutique is having a sale on evening dresses. The increase in consumer surplus comes from the benefit of the lower prices to

Table 7-16 -Refer to Table 7-16. Both the demand curve and the supply curve are straight lines. At equilibrium, 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