Question 1

Table 7-11
  
-Refer to Table 7-11.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 2

Welfare economics is the study of how

Accepted Answer

A)  the allocation of resources affects economic well-being. 
B)  a price ceiling compares to a price floor. 
C)  the government helps poor people. 
D)  a consumer's optimal choice affects her demand curve. 
A)  the allocation of resources affects economic well-being. 
B)  a price ceiling compares to a price floor. 
C)  the government helps poor people. 
D)  a consumer's optimal choice affects her demand curve.

Question 3

Market power and externalities are examples of market failures.

Accepted Answer

A) True 
 B)False

Question 4

We can say that the allocation of resources is efficient if

Accepted Answer

A)  producer surplus is maximized. 
B)  consumer surplus is maximized. 
C)  total surplus is maximized. 
D)  sellers' costs are minimized. 
A)  producer surplus is maximized. 
B)  consumer surplus is maximized. 
C)  total surplus is maximized. 
D)  sellers' costs are minimized.

Question 5

Figure 7-9
  
-Refer to Figure 7-9.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 6

The welfare of sellers is measured by

Accepted Answer

A)  consumer surplus. 
B)  producer surplus. 
C)  total surplus. 
D)  price. 
A)  consumer surplus. 
B)  producer surplus. 
C)  total surplus. 
D)  price.

Question 7

Figure 7-18
  
-Refer to Figure 7-18.The efficient price is

Accepted Answer

A)  $22, and the efficient quantity is 40. 
B)  $22, and the efficient quantity is 110. 
C)  $16, and the efficient quantity is 80. 
D)  $8, and the efficient quantity is 40. 
A)  $22, and the efficient quantity is 40. 
B)  $22, and the efficient quantity is 110. 
C)  $16, and the efficient quantity is 80. 
D)  $8, and the efficient quantity is 40.

Question 8

Table 7-5
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day.
  
-Refer to Table 7-5.Which of the following statements is correct?

Accepted Answer

A)  Neither Bob's consumer surplus nor Charisse's consumer surplus can exceed Allison's consumer surplus, for any price of an orange. 
B)  All three individuals will buy at least one orange only if the price of an orange is less than $0.25. 
C)  If the price of an orange is $0.60, then consumer surplus is $4.90. 
D)  All of the above are correct. 
A)  Neither Bob's consumer surplus nor Charisse's consumer surplus can exceed Allison's consumer surplus, for any price of an orange. 
B)  All three individuals will buy at least one orange only if the price of an orange is less than $0.25. 
C)  If the price of an orange is $0.60, then consumer surplus is $4.90. 
D)  All of the above are correct.

Question 9

Table 7-6
  
-Refer to Table 7-6.You have two essentially identical extra tickets to the Midwest Regional Sweet 16 game in the men's NCAA basketball tournament.The table shows the willingness to pay of the four potential buyers in the market for a ticket to the game.You hold an auction to sell the two tickets.Who makes the winning bids,and what do they offer to pay for the tickets?

Accepted Answer

A)  Michael and Earvin; more than $350 but less than or equal to $400 
B)  Michael and Earvin; more than $400 but less than or equal to $500 
C)  Earvin and Larry; more than $300 but less than or equal to $350 
D)  Larry and Charles; less than $300 
A)  Michael and Earvin; more than $350 but less than or equal to $400 
B)  Michael and Earvin; more than $400 but less than or equal to $500 
C)  Earvin and Larry; more than $300 but less than or equal to $350 
D)  Larry and Charles; less than $300

Question 10

In order to calculate consumer surplus in a market,we need to know willingness to pay and price.

Accepted Answer

A) True 
 B)False

Question 11

Figure 7-2
  
-Refer to Figure 7-2.When the price is P2,consumer surplus is

Accepted Answer

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

Question 12

Figure 7-12
  
-Refer to Figure 7-12.When the price rises from P1 to P2,which area represents the increase in producer surplus due to new producers entering the market?

Accepted Answer

A)  A 
B)  B 
C)  A+B 
D)  G 
A)  A 
B)  B 
C)  A+B 
D)  G

Question 13

Suppose Raymond and Victoria attend a charity benefit and participate in a silent auction.Each has in mind a maximum amount that he or she will bid for an oil painting by a locally famous artist.This maximum is called

Accepted Answer

A)  deadweight loss. 
B)  willingness to pay. 
C)  consumer surplus. 
D)  producer surplus. 
A)  deadweight loss. 
B)  willingness to pay. 
C)  consumer surplus. 
D)  producer surplus.

Question 14

Figure 7-10
  
-Refer to Figure 7-10.If the equilibrium price rises from $50 to $200,what is the producer surplus to new producers?

Accepted Answer

A)  $625 
B)  $3,750 
C)  $5,625 
D)  $10,000 
A)  $625 
B)  $3,750 
C)  $5,625 
D)  $10,000

Question 15

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 16

Figure 7-7
  
-Refer to Figure 7-7.If producer surplus is $14,then the price of the good is

Accepted Answer

A)  $11.00. 
B)  $12.00. 
C)  $13.50. 
D)  $14.75. 
A)  $11.00. 
B)  $12.00. 
C)  $13.50. 
D)  $14.75.

Question 17

Figure 7-1
  
-Refer to Figure 7-1.If the price of the good is $50,then consumer surplus amounts to

Accepted Answer

A)  $400. 
B)  $500. 
C)  $600. 
D)  $750. 
A)  $400. 
B)  $500. 
C)  $600. 
D)  $750.

Question 18

David tunes pianos in his spare time for extra income.Buyers of his service are willing to pay $135 per tuning.One particular week,David is willing to tune the first piano for $115,the second piano for $125,the third piano for $140,and the fourth piano for $175.Assume David is rational in deciding how many pianos to tune.His producer surplus is

Accepted Answer

A)  $-15. 
B)  $20. 
C)  $30. 
D)  $75. 
A)  $-15. 
B)  $20. 
C)  $30. 
D)  $75.

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

Figure 7-14
  
-Refer to Figure 7-14.If total surplus is $750 and consumer surplus is

Accepted Answer

A)  $500, then the price of the good is $200. 
B)  $450, then the price of the good is $200. 
C)  $600, then the price of the good is $175. 
D)  $500, then the price of the good is $175. 
A)  $500, then the price of the good is $200. 
B)  $450, then the price of the good is $200. 
C)  $600, then the price of the good is $175. 
D)  $500, then the price of the good is $175.

Table 7-11 -Refer to Table 7-11.Both the demand curve and the supply curve are straight lines.At equilibrium,producer surplus is

Welfare economics is the study of how

Market power and externalities are examples of market failures.

We can say that the allocation of resources is efficient if

Figure 7-9 -Refer to Figure 7-9.If the demand curve is D and the supply curve shifts from S' to S,what is the change in producer surplus?

The welfare of sellers is measured by

Figure 7-18 -Refer to Figure 7-18.The efficient price is

In order to calculate consumer surplus in a market,we need to know willingness to pay and price.

Figure 7-2 -Refer to Figure 7-2.When the price is P2,consumer surplus is

Figure 7-12 -Refer to Figure 7-12.When the price rises from P1 to P2,which area represents the increase in producer surplus due to new producers entering the market?

Suppose Raymond and Victoria attend a charity benefit and participate in a silent auction.Each has in mind a maximum amount that he or she will bid for an oil painting by a locally famous artist.This maximum is called

Figure 7-10 -Refer to Figure 7-10.If the equilibrium price rises from $50 to $200,what is the producer surplus to new producers?

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

Figure 7-7 -Refer to Figure 7-7.If producer surplus is $14,then the price of the good is

Figure 7-1 -Refer to Figure 7-1.If the price of the good is $50,then consumer surplus amounts to

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

Figure 7-14 -Refer to Figure 7-14.If total surplus is $750 and 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.

Application: 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 Market For the Factors of Production.

Earnings and Discrimination.

Income Inequality and Poverty.

The Theory of Consumer Choice.

Frontiers in Microeconomics.

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

Table 7-11 -Refer to Table 7-11.Both the demand curve and the supply curve are straight lines.At equilibrium,producer surplus is

Welfare economics is the study of how

Market power and externalities are examples of market failures.

We can say that the allocation of resources is efficient if

Figure 7-9 -Refer to Figure 7-9.If the demand curve is D and the supply curve shifts from S' to S,what is the change in producer surplus?

The welfare of sellers is measured by

Figure 7-18 -Refer to Figure 7-18.The efficient price is

In order to calculate consumer surplus in a market,we need to know willingness to pay and price.

Figure 7-2 -Refer to Figure 7-2.When the price is P2,consumer surplus is

Figure 7-12 -Refer to Figure 7-12.When the price rises from P1 to P2,which area represents the increase in producer surplus due to new producers entering the market?

Suppose Raymond and Victoria attend a charity benefit and participate in a silent auction.Each has in mind a maximum amount that he or she will bid for an oil painting by a locally famous artist.This maximum is called

Figure 7-10 -Refer to Figure 7-10.If the equilibrium price rises from $50 to $200,what is the producer surplus to new producers?

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

Figure 7-7 -Refer to Figure 7-7.If producer surplus is $14,then the price of the good is

Figure 7-1 -Refer to Figure 7-1.If the price of the good is $50,then consumer surplus amounts to

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

Figure 7-14 -Refer to Figure 7-14.If total surplus is $750 and 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.

Application: 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 Market For the Factors of Production.

Earnings and Discrimination.

Income Inequality and Poverty.

The Theory of Consumer Choice.

Frontiers in Microeconomics.

Filters