Exam 4: Consumer and Producer Surplus

Use the following to answer questions: Figure: The Market for Books -(Figure: The Market for Books) Look at the figure The Market for Books. At the equilibrium price of $24, find the total surplus in the market for books.

If the price of a good rises along an upward-sloping supply curve, then producer surplus:

Use the following to answer questions: Figure: Producer Surplus III -(Figure: Producer Surplus III) Look at the figure Producer Surplus III. If the price of the good is $4, producer surplus will equal:

Property rights benefit sellers of goods much more than they benefit consumers.

Total surplus shows the total benefit to society from production and consumption of a good.

Use the following to answer question: -(Table: Music Downloads) Two consumers, Eli and Madison, like to download songs to their iPhones, and the table Music Downloads represents their willingness to pay for each downloaded song. If an individual song can be downloaded for $1, what is the total consumer surplus received by these consumers?

If the market for concert tickets is in equilibrium and the fire marshal tries to reduce the number of tickets sold, all other things equal, total surplus will decrease.

Use the following to answer questions: -(Table: Firm's Willingness) The table Firm's Willingness explains the relation between the number of reports a firm is willing to produce and the lowest price it is willing to accept to prepare those reports. If the price of a report is $6, how many reports will be produced?

Economic signals:

Use the following to answer questions: Figure: Market for Hamburgers -(Figure: The Market for Hamburgers) The figure The Market for Hamburgers shows the weekly market for hamburgers in Irvine, Kentucky. If the price of burgers falls from $1.50 to $1.00, there is a loss in producer surplus. How much of the loss accrues because of the change in the quantity supplied?

Use the following to answer questions: -(Table: Willingness to Pay for Peanuts) Using the table Willingness to Pay for Peanuts, if the price of a bag of peanuts is $9, who will purchase a bag?

Christine has a linear demand curve for candy. If she wants to see her consumer surplus _____, she would like to see a(n) _____ in the market price of candy.

Use the following to answer questions: -(Table: Producer Surplus) Look at the table Producer Surplus. If the price of a ticket to see The Nutty Nutcracker is $50 and there is no other market for tickets, then total producer surplus for the five students is:

Suppose you pay $8 to see Tom Cruise in his next movie. Suppose Mr. Cruise receives $21 million to work in this movie. This means that:

Use the following to answer questions: Figure: Market for Hamburgers -(Figure: The Market for Hamburgers) The figure The Market for Hamburgers shows the weekly market for hamburgers in Irvine, Kentucky. If the price of a hamburger is $1 and 200 hamburgers are supplied, producer surplus will equal:

Prices are important economic signals because they convey information about how much consumers are willing to pay for a good and how much it costs sellers to produce a good.

Use the following to answer questions: Figure: Consumer Surplus I -(Figure: Consumer Surplus I) Look at the figure Consumer Surplus I. If the good is free, consumer surplus equals the area:

All of the following are possible reasons for market failure EXCEPT:

Some smaller retailers often go out of business when Walmart opens a new store. The most likely reason for this development is that:

Use the following to answer questions: Figure: Consumer Surplus III -(Figure: Consumer Surplus III) In the figure Consumer Surplus III, total consumer surplus is _____ when the price is $10.