Question 1

Celine buys a new MP3 player for $90. She receives consumer surplus of $15 on her purchase if her willingness to pay is

Accepted Answer

A) $15. 
B) $90. 
C) $105. 
D) $75. 
A) $15. 
B) $90. 
C) $105. 
D) $75.

Question 2

Tom tunes pianos in his spare time for extra income. Buyers of his service are willing to pay $155 per tuning. One particular week, Tom is willing to tune the first piano for $120, the second piano for $125, the third piano for $140, and the fourth piano for $160. Assume Tom is rational in deciding how many pianos to tune. His producer surplus is

Accepted Answer

A) $95. 
B) $80. 
C) $75. 
D) $60. 
A) $95. 
B) $80. 
C) $75. 
D) $60.

Question 3

Figure 7-18  
-Refer to Figure 7-18. Total surplus amounts to $500 if consumer surplus amounts to

Accepted Answer

A) $290 and if the price of the good is $150. 
B) $300 and if the price of the good is $130. 
C) $275 and if the price of the good is $160. 
D) $400 and if the price of the good is $100. 
A) $290 and if the price of the good is $150. 
B) $300 and if the price of the good is $130. 
C) $275 and if the price of the good is $160. 
D) $400 and if the price of the good is $100.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

The Surgeon General announces that eating apples promotes healthy teeth. As a result, the equilibrium price of apples

Accepted Answer

A) increases, and producer surplus increases. 
B) increases, and producer surplus decreases. 
C) decreases, and producer surplus increases. 
D) decreases, and producer surplus decreases. 
A) increases, and producer surplus increases. 
B) increases, and producer surplus decreases. 
C) decreases, and producer surplus increases. 
D) decreases, and producer surplus decreases.

Question 6

The decisions of buyers and sellers that affect people who are not participants in the market create

Accepted Answer

A) market power. 
B) externalities. 
C) profiteering. 
D) market equilibrium. 
A) market power. 
B) externalities. 
C) profiteering. 
D) market equilibrium.

Question 7

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

Accepted Answer

A) $250, and on the second unit of the good that is sold, producer surplus is $100. 
B) $250, and on the second unit of the good that is sold, producer surplus is $150. 
C) $350, and on the second unit of the good that is sold, producer surplus is $100. 
D) $350, and on the second unit of the good that is sold, producer surplus is $150. 
A) $250, and on the second unit of the good that is sold, producer surplus is $100. 
B) $250, and on the second unit of the good that is sold, producer surplus is $150. 
C) $350, and on the second unit of the good that is sold, producer surplus is $100. 
D) $350, and on the second unit of the good that is sold, producer surplus is $150.

Question 8

Figure 7-3  
-Refer to Figure 7-3. When the price is P1, consumer surplus is

Accepted Answer

A) A. 
B) A+B. 
C) A+B+C. 
D) A+B+D. 
A) A. 
B) A+B. 
C) A+B+C. 
D) A+B+D.

Question 9

Scenario 7-1
Suppose market demand is given by the equation  
-Refer to Scenario 7-1. If the market equilibrium price rises from $10 to $15, what is the change in total consumer surplus in the market?

Accepted Answer

Consumer s

Question 10

Total surplus is represented by the area

Accepted Answer

A) under the demand curve and above the price. 
B) above the supply curve and up to the price. 
C) under the supply curve and up to the price. 
D) between the demand and supply curves up to the point of equilibrium. 
A) under the demand curve and above the price. 
B) above the supply curve and up to the price. 
C) under the supply curve and up to the price. 
D) between the demand and supply curves up to the point of equilibrium.

Question 11

Figure 7-9  
-Refer to Figure 7-9. If the price of the good is $9.50, then producer surplus is

Accepted Answer

A) $3.00. 
B) $6.50. 
C) $10.50. 
D) $8.50. 
A) $3.00. 
B) $6.50. 
C) $10.50. 
D) $8.50.

Question 12

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.

Accepted Answer

A) True 
 B)False

Question 13

Table 7-15
The following table represents the costs of five possible sellers.
Seller
Cost ($)
Quentin
10
Ruby
30
Sandra
60
Thomas
100
Ursula
150
-Refer to Table 7-15. If each producer has one unit available for sale, and if the market equilibrium price is $70, how much is the combined total cost of all participating sellers in the market?

Accepted Answer

A) $100 
B) $150 
C) $250 
D) $350 
A) $100 
B) $150 
C) $250 
D) $350

Question 14

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

Accepted Answer

A) The price determines which buyers and which sellers participate in the market. 
B) Those buyers who value the good more than the price choose to buy the good. 
C) Those sellers whose costs are less than the price choose to produce and sell the good. 
D) Consumer surplus will be equal to producer surplus. 
A) The price determines which buyers and which sellers participate in the market. 
B) Those buyers who value the good more than the price choose to buy the good. 
C) Those sellers whose costs are less than the price choose to produce and sell the good. 
D) Consumer surplus will be equal to producer surplus.

Question 15

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

Accepted Answer

A) Producer surplus increases by $625. 
B) Producer surplus increases by $1,875. 
C) Producer surplus decreases by $625. 
D) Producer surplus decreases by $1,875. 
A) Producer surplus increases by $625. 
B) Producer surplus increases by $1,875. 
C) Producer surplus decreases by $625. 
D) Producer surplus decreases by $1,875.

Question 16

Table 7-10
The following table represents the costs of five possible sellers.
Seller
Cost
Abby
$1,600
Bobby
$1,300
Dianne
$1,100
Evaline
$900
Carlos
$800
-Refer to Table 7-10. If the market price is $1,200, the producer surplus in the market is

Accepted Answer

A) $100. 
B) $800. 
C) $400. 
D) $500. 
A) $100. 
B) $800. 
C) $400. 
D) $500.

Question 17

Figure 7-7  
-Refer to Figure 7-7. What is the consumer surplus if the price is $100?

Accepted Answer

A) $2,500 
B) $5,000 
C) $10,000 
D) $20,000 
A) $2,500 
B) $5,000 
C) $10,000 
D) $20,000

Question 18

Table 7-18
The following table shows the cost of producing a good for the only four producers in a market.  
-Refer to Table 7-18. If the market equilibrium price is $28, what is total producer surplus in the market?

Accepted Answer

Total prod

Question 19

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.

Question 20

Figure 7-5  
-Refer to Figure 7-5. If the price of the good is $12, then consumer surplus is

Accepted Answer

A) $9. 
B) $11. 
C) $13. 
D) $16. 
A) $9. 
B) $11. 
C) $13. 
D) $16.

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

Celine buys a new MP3 player for $90. She receives consumer surplus of $15 on her purchase if her willingness to pay is

Figure 7-18 -Refer to Figure 7-18. Total surplus amounts to $500 if consumer surplus amounts to

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

The Surgeon General announces that eating apples promotes healthy teeth. As a result, the equilibrium price of apples

The decisions of buyers and sellers that affect people who are not participants in the market create

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 7-3 -Refer to Figure 7-3. When the price is P1, consumer surplus is

Scenario 7-1 Suppose market demand is given by the equation -Refer to Scenario 7-1. If the market equilibrium price rises from $10 to $15, what is the change in total consumer surplus in the market?

Total surplus is represented by the area

Figure 7-9 -Refer to Figure 7-9. If the price of the good is $9.50, then producer surplus is

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.

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

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

Table 7-10 The following table represents the costs of five possible sellers. Seller Cost Abby $1,600 Bobby $1,300 Dianne $1,100 Evaline $900 Carlos $800 -Refer to Table 7-10. If the market price is $1,200, the producer surplus in the market is

Figure 7-7 -Refer to Figure 7-7. What is the consumer surplus if the price is $100?

Table 7-18 The following table shows the cost of producing a good for the only four producers in a market. -Refer to Table 7-18. If the market equilibrium price is $28, what is total producer surplus in the market?

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

Figure 7-5 -Refer to Figure 7-5. If the price of the good is $12, then consumer 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

Applications: 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

Measuring a Nation S Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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