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

Table 7-14 -Refer to Table 7-14. You and your best friend want to hire a professional photographer to take pictures of your two families. The table shows the costs of the four potential sellers in the local photography market. You and your friend agree to offer $500 for each session. Who accepts the offer, and what is the total producer surplus in the market?

Table 7-10 The following table represents the costs of five possible sellers. -Refer to Table 7-10. If the price is $1,000,

Billie Jo values a stainless steel dishwasher for her new house at $500, but she succeeds in buying one for $425. Billie Jo's willingness to pay for the dishwasher is

Table 7-19 -Refer to Table 7-19. How much is total producer surplus at the equilibrium price in this market?

Figure 7-1 -Refer to Figure 7-1. If the price of the good is $150, then consumer surplus amounts to

Figure 7-15 -Refer to Figure 7-15. Area B represents

Total surplus is represented by the area

The lower the price, the lower the producer surplus, all else equal.

Producer surplus is the cost of production minus the amount a seller is paid.

Figure 7-1 -Refer to Figure 7-1. If the price of the good is $50, then consumer surplus amounts to

Figure 7-20 -Refer to Figure 7-20. For quantities greater than M, the value to the marginal buyer is

Figure 7-33 -Refer to Figure 7-33. Suppose demand shifts such that consumers wish to purchase 12 fewer units at every price. How much is total surplus in this market at the new equilibrium price?

Scenario 7-2 Suppose market demand and market supply are given by the equations: -Refer to Scenario 7-2. How much is total surplus at the equilibrium price in this market?

Suppose you sell a kayak for $600, but you were willing to sell it for $450. The buyer was willing to pay $650. The total surplus is $200.

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

When the supply of a good decreases and the demand for the good remains unchanged, consumer surplus

Suppose that Firms A and B each produce high-resolution computer monitors, but Firm A can do so at a lower cost. Cassie and David each want to purchase a high-resolution computer monitor, but David is willing to pay more than Cassie. Which of the following market outcomes is efficient?

Figure 7-32 -Refer to Figure 7-32. How much are consumer surplus, producer surplus, and total surplus at the market equilibrium price?

At present, the maximum legal price for a human kidney is $0. The price of $0 maximizes

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