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

Bill created a new software program he is willing to sell for $300. He sells his first copy and enjoys a producer surplus of $250. What is the price paid for the software?

The French expression used by free-market advocates, which literally translates as "allow them to do," is

Producer surplus measures the

Joel has a 1966 Mustang, which he sells to Susie, an avid car collector. Susie is pleased since she paid $8,000 for the car but would have been willing to pay $11,000 for the car. Susie's consumer surplus is $2,000.

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.

Figure 7-12 -Refer to Figure 7-12. If the equilibrium price rises from $200 to $350, what is the producer surplus to new producers?

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

Figure 7-22 -Refer to Figure 7-22. If 110 units of the good are bought and sold, then

In a market, the marginal buyer is the buyer

Suppose Lauren, Leslie and Lydia all purchase bulletin boards for their rooms for $15 each. Lauren's willingness to pay was $35, Leslie's willingness to pay was $25, and Lydia's willingness to pay was $30. Total consumer surplus for these three would be

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

Figure 7-9 -Refer to Figure 7-9. If producer surplus is $19, then the price of the good is

Inefficiency can be caused in a market by the presence of

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?

Table 7-12 The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality. Seller Cost Marcia $200 Jan $250 Cindy $350 Greg $400 Peter $700 Bobby $800 -Refer to Table 7-12. The equilibrium market price for 10 piano lessons is $300. What is the total producer surplus in the market?

Scenario 7-1 Suppose market demand is given by the equation -Refer to Scenario 7-1. If the market equilibrium price falls from $10 to $5, how much additional consumer surplus do consumers initially in the market at the $10 price receive?

Laissez-faire is a French expression which literally means

Corn chips and potato chips are substitutes. Good weather that sharply increases the corn harvest would

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

The consumption of water by local residents that may include pesticide runoff from local farmers' fields is an example of