Question 1

Total surplus in a market is consumer surplus minus producer surplus.

Accepted Answer

A) True 
 B)False

Question 2

Alex tutors in his spare time for extra income. Students are willing to pay $48 per hour for as many hours Alex is willing to tutor. On a particular day, he is willing to tutor the first hour for $16, the second hour for $24.0, the third hour for $29.0, and the fourth hour for $48. Assume Alex is rational in deciding how many hours to tutor. His producer surplus is

Accepted Answer

A) $56.0. 
B) $75.0. 
C) $133.0. 
D) $69.0. 
A) $56.0. 
B) $75.0. 
C) $133.0. 
D) $69.0.

Question 3

Figure 7-11
   ​
-Refer to Figure 7-11. If the market equilibrium price is $35, how much is total producer surplus in this market?

Accepted Answer

Total prod

Question 4

The distinction between efficiency and equality can be described as follows:

Accepted Answer

A) Efficiency refers to maximizing the number of trades among buyers and sellers; equality refers to maximizing the gains from trade among buyers and sellers. 
B) Efficiency refers to minimizing the price paid by buyers; equality refers to maximizing the gains from trade among buyers and sellers. 
C) Efficiency refers to maximizing the size of the pie; equality refers to producing a pie of a given size at the least possible cost. 
D) Efficiency refers to maximizing the size of the pie; equality refers to distributing the pie fairly among members of society. 
A) Efficiency refers to maximizing the number of trades among buyers and sellers; equality refers to maximizing the gains from trade among buyers and sellers. 
B) Efficiency refers to minimizing the price paid by buyers; equality refers to maximizing the gains from trade among buyers and sellers. 
C) Efficiency refers to maximizing the size of the pie; equality refers to producing a pie of a given size at the least possible cost. 
D) Efficiency refers to maximizing the size of the pie; equality refers to distributing the pie fairly among members of society.

Question 5

A seller's opportunity cost measures the

Accepted Answer

A) value of everything she must give up to produce a good. 
B) amount she is paid for a good minus her cost of providing it. 
C) consumer surplus. 
D) out-of-pocket expenses to produce a good but not the value of her time. 
A) value of everything she must give up to produce a good. 
B) amount she is paid for a good minus her cost of providing it. 
C) consumer surplus. 
D) out-of-pocket expenses to produce a good but not the value of her time.

Question 6

Table 7-11
​
​
 $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { (Dollars per unit) }
\end{array} & \begin{array} { c } 
\text { Quantity Demanded } \
\text { (Units) }
\end{array} & \begin{array} { c } 
\text { Quantity Supplied } \
\text { (Units) }
\end{array} \
\hline 12.00 & 0 & 36 \
\hline 10.00 & 3 & 30 \
\hline 8.00 & 6 & 24 \
\hline 6.00 & 9 & 18 \
\hline 4.00 & 12 & 12 \
\hline 2.00 & 15 & 6 \
\hline 0.00 & 18 & 0 \
\hline
\end{array}$$ ​
-Refer to Table 7-11. 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

Accepted Answer

A) $42. 
B) $48. 
C) $54. 
D) $60. 
A) $42. 
B) $48. 
C) $54. 
D) $60.

Question 7

Scenario 7-1
Suppose market demand is given by the equation
 $$Q ^ { D } = 40 - 2 P$$
-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 8

Refer to Scenario 7-2. Suppose a reduction in input prices shifts the market supply curve to
 $$Q ^ { S } = P$$ By how much does total consumer surplus increase for those consumers who were already willing to purchase the good with the original supply curve?

Accepted Answer

For those consumers already in

Question 9

Figure 7-13
   ​
-Refer to Figure 7-13. How much is total surplus in this market at the equilibrium price?

Accepted Answer

Total surp

Question 10

Ticket scalping can increase total surplus in the market for tickets to sporting events.

Accepted Answer

A) True 
 B)False

Question 11

Figure 7-5
  
-Refer to Figure 7-5. If the supply curve is S', the demand curve is D, and the equilibrium price is $150, what is the producer surplus?

Accepted Answer

A) $625 
B) $1,250 
C) $2,500 
D) $5,000 
A) $625 
B) $1,250 
C) $2,500 
D) $5,000

Question 12

Table 7-4
For each of the three potential buyers of apples, the table displays the willingness to pay for Bob, Sasha, and Eric, who are the only three buyers of apples. Assume that only three apples can be supplied per day.
​
​
 $\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\text {Willingness to Pay}$
$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\text {(Dollars)}$
$\begin{array}{|c|c|c|c|} 
\hline& \text { First Apple } & \text { Second Apple } & \text { Third Apple } \
\hline \text { Bob } & 2.00 & 1.50 & 0.75 \
\hline \text { Sasha } & 1.50 & 1.00 & 0.60 \
\hline \text { Eric } & 0.75 & 0.25 & 0.00 \
\hline
\end{array}$

-Refer to Table 7-4. If the market price of an apple increases from $0.80 to $1.05, then consumer surplus

Accepted Answer

A) increases by $0.75. 
B) decreases by $0.95. 
C) decreases by $0.75. 
D) decreases by $1.00. 
A) increases by $0.75. 
B) decreases by $0.95. 
C) decreases by $0.75. 
D) decreases by $1.00.

Question 13

Table 7-11
​
​
 $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { (Dollars per unit) }
\end{array} & \begin{array} { c } 
\text { Quantity Demanded } \
\text { (Units) }
\end{array} & \begin{array} { c } 
\text { Quantity Supplied } \
\text { (Units) }
\end{array} \
\hline 12.00 & 0 & 36 \
\hline 10.00 & 3 & 30 \
\hline 8.00 & 6 & 24 \
\hline 6.00 & 9 & 18 \
\hline 4.00 & 12 & 12 \
\hline 2.00 & 15 & 6 \
\hline 0.00 & 18 & 0 \
\hline
\end{array}$$ ​
-Refer to Table 7-11. Both the demand curve and the supply curve are straight lines. At equilibrium, consumer surplus is

Accepted Answer

A) $24. 
B) $36. 
C) $42. 
D) $48. 
A) $24. 
B) $36. 
C) $42. 
D) $48.

Question 14

Total surplus = Value to buyers - Costs to sellers.

Accepted Answer

A) True 
 B)False

Question 15

In order to conclude that markets are efficient, we assume that they are perfectly competitive.

Accepted Answer

A) True 
 B)False

Question 16

Connie can clean windows in large office buildings at a cost of $1 per window. The market price for window-cleaning services is $3 per window. If Connie cleans 100 windows, her producer surplus is $200.

Accepted Answer

A) True 
 B)False

Question 17

The equilibrium of supply and demand in a market maximizes the total benefits to buyers and sellers of participating in that market.

Accepted Answer

A) True 
 B)False

Question 18

Table 7-11
​
​
 $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { (Dollars per unit) }
\end{array} & \begin{array} { c } 
\text { Quantity Demanded } \
\text { (Units) }
\end{array} & \begin{array} { c } 
\text { Quantity Supplied } \
\text { (Units) }
\end{array} \
\hline 12.00 & 0 & 36 \
\hline 10.00 & 3 & 30 \
\hline 8.00 & 6 & 24 \
\hline 6.00 & 9 & 18 \
\hline 4.00 & 12 & 12 \
\hline 2.00 & 15 & 6 \
\hline 0.00 & 18 & 0 \
\hline
\end{array}$$ ​
-Refer to Table 7-11. At a price of $2.00, total surplus is

Accepted Answer

A) larger than it would be at the equilibrium price. 
B) smaller than it would be at the equilibrium price. 
C) the same as it would be at the equilibrium price. 
D) There is insufficient information to make this determination. 
A) larger than it would be at the equilibrium price. 
B) smaller than it would be at the equilibrium price. 
C) the same as it would be at the equilibrium price. 
D) There is insufficient information to make this determination.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

An example of normative analysis is studying

Accepted Answer

A) how market forces produce equilibrium. 
B) surpluses and shortages. 
C) whether equilibrium outcomes are socially desirable. 
D) income distributions. 
A) how market forces produce equilibrium. 
B) surpluses and shortages. 
C) whether equilibrium outcomes are socially desirable. 
D) income distributions.

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

Total surplus in a market is consumer surplus minus producer surplus.

Figure 7-11 ​ -Refer to Figure 7-11. If the market equilibrium price is $35, how much is total producer surplus in this market?

The distinction between efficiency and equality can be described as follows:

A seller's opportunity cost measures the

Scenario 7-1 Suppose market demand is given by the equation QD=40−2PQ ^ { D } = 40 - 2 PQD=40−2P -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?

Refer to Scenario 7-2. Suppose a reduction in input prices shifts the market supply curve to QS=PQ ^ { S } = PQS=P By how much does total consumer surplus increase for those consumers who were already willing to purchase the good with the original supply curve?

Figure 7-13 ​ -Refer to Figure 7-13. How much is total surplus in this market at the equilibrium price?

Ticket scalping can increase total surplus in the market for tickets to sporting events.

Figure 7-5 -Refer to Figure 7-5. If the supply curve is S', the demand curve is D, and the equilibrium price is $150, what is the producer surplus?

Table 7-11 ​ ​ Price (Dollars per unit) Quantity Demanded (Units) Quantity Supplied (Units) 12.00 0 36 10.00 3 30 8.00 6 24 6.00 9 18 4.00 12 12 2.00 15 6 0.00 18 0 ​ -Refer to Table 7-11. Both the demand curve and the supply curve are straight lines. At equilibrium, consumer surplus is

Total surplus = Value to buyers - Costs to sellers.

In order to conclude that markets are efficient, we assume that they are perfectly competitive.

Connie can clean windows in large office buildings at a cost of $1 per window. The market price for window-cleaning services is $3 per window. If Connie cleans 100 windows, her producer surplus is $200.

The equilibrium of supply and demand in a market maximizes the total benefits to buyers and sellers of participating in that market.

Table 7-11 ​ ​ Price (Dollars per unit) Quantity Demanded (Units) Quantity Supplied (Units) 12.00 0 36 10.00 3 30 8.00 6 24 6.00 9 18 4.00 12 12 2.00 15 6 0.00 18 0 ​ -Refer to Table 7-11. At a price of $2.00, total surplus is

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

An example of normative analysis is studying

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 Nations 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

Filters

Figure 7-11 -Refer to Figure 7-11. If the market equilibrium price is $35, how much is total producer surplus in this market?

Scenario 7-1 Suppose market demand is given by the equation $Q ^ { D } = 40 - 2 P$ -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?

Refer to Scenario 7-2. Suppose a reduction in input prices shifts the market supply curve to $Q ^ { S } = P$ By how much does total consumer surplus increase for those consumers who were already willing to purchase the good with the original supply curve?

Figure 7-13 -Refer to Figure 7-13. How much is total surplus in this market at the equilibrium price?

Table 7-11 Price (Dollars per unit) Quantity Demanded (Units) Quantity Supplied (Units) 12.00 0 36 10.00 3 30 8.00 6 24 6.00 9 18 4.00 12 12 2.00 15 6 0.00 18 0 -Refer to Table 7-11. Both the demand curve and the supply curve are straight lines. At equilibrium, consumer surplus is

Table 7-11 Price (Dollars per unit) Quantity Demanded (Units) Quantity Supplied (Units) 12.00 0 36 10.00 3 30 8.00 6 24 6.00 9 18 4.00 12 12 2.00 15 6 0.00 18 0 -Refer to Table 7-11. At a price of $2.00, total surplus is