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

Figure 7-22 -Refer to Figure 7-22. Assume demand increases, which causes the equilibrium price to increase from $50 to $70. The increase in producer surplus would be

Wendy is willing to pay $50 for a concert ticket and Bruce would like to receive $25. If the market price is $40 for this transaction, then the total surplus would be $15.

Donald produces nails at a cost of $350 per ton. If he sells the nails for $500 per ton, his producer surplus is

Suppose Raymond and Victoria attend a charity benefit and participate in a silent auction. Each has in mind a maximum amount that he or she will bid for an oil painting by a locally famous artist. This maximum is called

On a graph, consumer surplus is represented by the area

Table 7-16 -Refer to Table 7-16. Both the demand curve and the supply curve are straight lines. If the price is $4 but only 6 units are bought and sold, total surplus will be

Figure 7-15 -Refer to Figure 7-15. Suppose producer surplus is larger than C but smaller than A+B+C. The price of the good must be

Table 7-8 During the last two days, Chad purchased a latte from two different stores. The table below shows Chad's willingness to pay on each day and his consumer surplus from each purchase. -Refer to Table 7-8. The price that Chad paid for a latte on the second day is

Table 7-3 The only four consumers in a market have the following willingness to pay for a good: -Refer to Table 7-3. If the price is $20, then consumer surplus in the market is

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. Which of the following statements is correct?

Which tools allow economists to determine if the allocation of resources determined by free markets is desirable?

Consumer surplus

Figure 7-32 -Refer to Figure 7-32. At what price will total surplus be maximized in this market?

Figure 7-32 -Refer to Figure 7-32. If the government imposed a price ceiling at $20 in this market, how much are consumer surplus, producer surplus, and total surplus?

What do economists call the highest amount a consumer will pay to purchase a good?

Which of the following statements is not correct about a market in equilibrium?

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

Figure 7-31 -Refer to Figure 7-31. If the market equilibrium price is $25, how much is total producer surplus in this market?

Economists normally assume people's preferences should be

The 2005 Boston Globe article discussing ticket scalping points out that the price people will pay for tickets will rise when