Question 1

Motor oil and gasoline are complements. If the price of motor oil increases, consumer surplus in the gasoline market

Accepted Answer

A) decreases. 
B) is unchanged. 
C) increases. 
D) may increase, decrease, or remain unchanged. 
A) decreases. 
B) is unchanged. 
C) increases. 
D) may increase, decrease, or remain unchanged.

Question 2

Figure 7-12
   ​
-Refer to Figure 7-12. If the government imposed a price floor at $35 in this market, how much is consumer surplus?

Accepted Answer

Consumer s

Question 3

If the government imposes a binding price floor in a market, then the consumer surplus in that market will decrease.

Accepted Answer

A) True 
 B)False

Question 4

Figure 7-10
   ​
-Suppose John's cost for performing some carpentry work is $120. If John is paid $200 for the carpentry work, what is his producer surplus?

Accepted Answer

His produc

Question 5

Figure 7-1
  
-Refer to Figure 7-1. 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 6

Suppose that the equilibrium price in the market for widgets is $5. If a law increased the minimum legal price for widgets to $6, producer surplus

Accepted Answer

A) would necessarily increase even if the higher price resulted in a surplus of widgets. 
B) would necessarily decrease because the higher price would create a surplus of widgets. 
C) might increase or decrease. 
D) would be unaffected. 
A) would necessarily increase even if the higher price resulted in a surplus of widgets. 
B) would necessarily decrease because the higher price would create a surplus of widgets. 
C) might increase or decrease. 
D) would be unaffected.

Question 7

If Darby values a soccer ball at $50, and she pays $40 for it, her consumer surplus is $10.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Total surplus in a market can be measured as the area below the supply curve plus the area above the demand curve, up to the point of equilibrium.

Accepted Answer

A) True 
 B)False

Question 10

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 is $10, how much is total consumer surplus in this market?

Accepted Answer

Consumer s

Question 11

Scenario 7-2
Suppose market demand and market supply are given by the equations:
​
QS1U1P1D S1S1P0= 40 - P
QS1U1P1S S1S1P0= P - 4
-Refer to Scenario 7-2. How much is total consumer surplus at the equilibrium price in this market?

Accepted Answer

Total consumer surpl

Question 12

Efficiency refers to whether a market outcome is fair, while equality refers to whether the maximum amount of output was produced from a given number of inputs.

Accepted Answer

A) True 
 B)False

Question 13

If the price a consumer pays for a product is equal to a consumer's willingness to pay, then the consumer surplus relevant to that purchase is

Accepted Answer

A) zero. 
B) negative, and the consumer would not purchase the product. 
C) positive, and the consumer would purchase the product. 
D) There is not enough information given to answer this question. 
A) zero. 
B) negative, and the consumer would not purchase the product. 
C) positive, and the consumer would purchase the product. 
D) There is not enough information given to answer this question.

Question 14

The Surgeon General announces that eating chocolate increases tooth decay. As a result, the equilibrium price of chocolate

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 15

Markets will always allocate resources efficiently.

Accepted Answer

A) True 
 B)False

Question 16

Figure 7-11
   ​
-Refer to Figure 7-11. If the market equilibrium price is $25, how much is total producer surplus in this market?

Accepted Answer

Total prod

Question 17

Figure 7-8
  
-Refer to Figure 7-8. Total surplus can be measured as the area

Accepted Answer

A) JNK. 
B) JNML. 
C) JRL. 
D) JNL. 
A) JNK. 
B) JNML. 
C) JRL. 
D) JNL.

Question 18

Figure 7-12
   ​
-Refer to Figure 7-12. How much are consumer surplus, producer surplus, and total surplus at the market equilibrium price?

Accepted Answer

.Consumer surplus is

Question 19

Figure 7-14
   ​
-Refer to Figure 7-14. Suppose there is initially a price floor set at $10 in this market. If the government removed the price floor, by how much would total consumer surplus increase for those consumers who enter the market after the price floor is removed?

Accepted Answer

New consumers entering the mar

Question 20

Figure 7-11
   ​
-Refer to Figure 7-11. If the market equilibrium price rises from $25 to $35, how much is the producer surplus for the producers entering the market after the price increase?

Accepted Answer

The producer surplus

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

Motor oil and gasoline are complements. If the price of motor oil increases, consumer surplus in the gasoline market

Figure 7-12 ​ -Refer to Figure 7-12. If the government imposed a price floor at $35 in this market, how much is consumer surplus?

If the government imposes a binding price floor in a market, then the consumer surplus in that market will decrease.

Figure 7-10 ​ -Suppose John's cost for performing some carpentry work is $120. If John is paid $200 for the carpentry work, what is his producer surplus?

Figure 7-1 -Refer to Figure 7-1. When the price is P1, consumer surplus is

Suppose that the equilibrium price in the market for widgets is $5. If a law increased the minimum legal price for widgets to $6, producer surplus

If Darby values a soccer ball at $50, and she pays $40 for it, her consumer surplus is $10.

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

Total surplus in a market can be measured as the area below the supply curve plus the area above the demand curve, up to the point of equilibrium.

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 is $10, how much is total consumer surplus in this market?

Scenario 7-2 Suppose market demand and market supply are given by the equations: ​ QD = 40 - P QS = P - 4 -Refer to Scenario 7-2. How much is total consumer surplus at the equilibrium price in this market?

Efficiency refers to whether a market outcome is fair, while equality refers to whether the maximum amount of output was produced from a given number of inputs.

If the price a consumer pays for a product is equal to a consumer's willingness to pay, then the consumer surplus relevant to that purchase is

The Surgeon General announces that eating chocolate increases tooth decay. As a result, the equilibrium price of chocolate

Markets will always allocate resources efficiently.

Figure 7-11 ​ -Refer to Figure 7-11. If the market equilibrium price is $25, how much is total producer surplus in this market?

Figure 7-8 -Refer to Figure 7-8. Total surplus can be measured as the area

Figure 7-12 ​ -Refer to Figure 7-12. How much are consumer surplus, producer surplus, and total surplus at the market equilibrium price?

Figure 7-14 ​ -Refer to Figure 7-14. Suppose there is initially a price floor set at $10 in this market. If the government removed the price floor, by how much would total consumer surplus increase for those consumers who enter the market after the price floor is removed?

Figure 7-11 ​ -Refer to Figure 7-11. If the market equilibrium price rises from $25 to $35, how much is the producer surplus for the producers entering the market after the price increase?

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 7-12 -Refer to Figure 7-12. If the government imposed a price floor at $35 in this market, how much is consumer surplus?

Figure 7-10 -Suppose John's cost for performing some carpentry work is $120. If John is paid $200 for the carpentry work, what is his producer surplus?

Figure 7-1 -Refer to Figure 7-1. When the price is P₁, consumer surplus is

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 is $10, how much is total consumer surplus in this market?

Scenario 7-2 Suppose market demand and market supply are given by the equations: Q^D= 40 - P Q^S= P - 4 -Refer to Scenario 7-2. How much is total consumer surplus at the equilibrium price in this market?

Figure 7-11 -Refer to Figure 7-11. If the market equilibrium price is $25, how much is total producer surplus in this market?

Figure 7-12 -Refer to Figure 7-12. How much are consumer surplus, producer surplus, and total surplus at the market equilibrium price?

Figure 7-14 -Refer to Figure 7-14. Suppose there is initially a price floor set at $10 in this market. If the government removed the price floor, by how much would total consumer surplus increase for those consumers who enter the market after the price floor is removed?

Figure 7-11 -Refer to Figure 7-11. If the market equilibrium price rises from $25 to $35, how much is the producer surplus for the producers entering the market after the price increase?