Question 1

Raisin bran and milk are complements.An increase in the price of raisins will

Accepted Answer

A)  increase consumer surplus in the market for raisin bran and decrease producer surplus in the market for milk. 
B)  increase consumer surplus in the market for raisin bran and increase producer surplus in the market for milk. 
C)  decrease consumer surplus in the market for raisin bran and increase producer surplus in the market for milk. 
D)  decrease consumer surplus in the market for raisin bran and decrease producer surplus in the market for milk. 
A)  increase consumer surplus in the market for raisin bran and decrease producer surplus in the market for milk. 
B)  increase consumer surplus in the market for raisin bran and increase producer surplus in the market for milk. 
C)  decrease consumer surplus in the market for raisin bran and increase producer surplus in the market for milk. 
D)  decrease consumer surplus in the market for raisin bran and decrease producer surplus in the market for milk.

Question 2

Kelly is willing to pay $68 for a pair of shoes for a wedding.She finds a pair at her favorite outlet shoe store for $58.Kelly's consumer surplus is

Accepted Answer

A)  $10. 
B)  $28. 
C)  $58. 
D)  $68. 
A)  $10. 
B)  $28. 
C)  $58. 
D)  $68.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Figure 7-2
  
-Refer to Figure 7-2.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 5

Table 7-4
The numbers in Table 7-1 reveal the maximum willingness to pay for a ticket to a Chicago Cubs vs. St. Louis Cardinal's baseball game at Wrigley Field.
  
-Refer to Table 7-4.If you have two (essentially)identical tickets that you sell to the group in an auction,what will be the selling price for each ticket?

Accepted Answer

A)  $21 
B)  $26 
C)  $51 
D)  $61 
A)  $21 
B)  $26 
C)  $51 
D)  $61

Question 6

Figure 7-20
  
-Refer to Figure 7-20.If 4 units of the good are produced and sold,then

Accepted Answer

A)  the cost to sellers exceeds the value to buyers. 
B)  producer surplus is maximized. 
C)  total surplus is minimized. 
D)  the allocation of resources is inefficient. 
A)  the cost to sellers exceeds the value to buyers. 
B)  producer surplus is maximized. 
C)  total surplus is minimized. 
D)  the allocation of resources is inefficient.

Question 7

Table 7-9
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
  
-Refer to Table 7-9.The equilibrium market price for 10 piano lessons is $400.What is the total producer surplus in the market?

Accepted Answer

A)  $0 
B)  $300 
C)  $400 
D)  $700 
A)  $0 
B)  $300 
C)  $400 
D)  $700

Question 8

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 9

Chad is willing to pay $5.00 to get his first cup of morning latté; he is willing to pay $4.50 for a second cup.He buys his first cup from a vendor selling latté for $3.75 per cup.He returns to that vendor later in the morning to find that the vendor has increased her price to $3.90 per cup.Chad buys a second cup.Which of the following statements is correct?

Accepted Answer

A)  Chad's willingness to pay for his second cup of latté was smaller than his willingness to pay for his first cup of latté. 
B)  Chad's consumer surplus on his second cup of latté was larger than his consumer surplus on his first cup of latté. 
C)  Chad is irrational in that he is willing to pay a different price for his second cup of latté than what he is willing to pay for his first cup of latté. 
D)  Chad places a higher value on his second cup of latté than on his first cup of latté. 
A)  Chad's willingness to pay for his second cup of latté was smaller than his willingness to pay for his first cup of latté. 
B)  Chad's consumer surplus on his second cup of latté was larger than his consumer surplus on his first cup of latté. 
C)  Chad is irrational in that he is willing to pay a different price for his second cup of latté than what he is willing to pay for his first cup of latté. 
D)  Chad places a higher value on his second cup of latté than on his first cup of latté.

Question 10

If the United States legally allowed for a market in transplant organs,it is estimated that one kidney would sell for at least $100,000.

Accepted Answer

A) True 
 B)False

Question 11

Jeff decides that he would pay as much as $2,000 for a new laptop computer.He buys the computer and realizes a consumer surplus of $300.How much did Jeff pay for his computer?

Accepted Answer

A)  $300. 
B)  $1,700. 
C)  $2,000. 
D)  $2,300. 
A)  $300. 
B)  $1,700. 
C)  $2,000. 
D)  $2,300.

Question 12

If a market is in equilibrium,then it is impossible for a social planner to raise economic welfare by increasing or decreasing the quantity of the good.

Accepted Answer

A) True 
 B)False

Question 13

Figure 7-17
  
-Refer to Figure 7-17.Which area represents producer surplus when the price is P1?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 14

Figure 7-9
  
-Refer to Figure 7-9.If the supply curve is S and the demand curve shifts from D to D',what is the increase in producer surplus due to new producers entering the market?

Accepted Answer

A)  $625 
B)  $2,500 
C)  $3,125 
D)  $5,625 
A)  $625 
B)  $2,500 
C)  $3,125 
D)  $5,625

Question 15

Suppose there is an increase in supply that reduces market price.Consumer surplus increases because (1)consumer surplus received by existing buyers increases and (2)new buyers enter the market.

Accepted Answer

A) True 
 B)False

Question 16

Table 7-9
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
  
-Refer to Table 7-9.The equilibrium market price for 10 piano lessons is $300.What is the total producer surplus in the market?

Accepted Answer

A)  $50 
B)  $150 
C)  $1,050 
D)  $1,500 
A)  $50 
B)  $150 
C)  $1,050 
D)  $1,500

Question 17

Laissez-faire is a French expression which literally means

Accepted Answer

A)  to make do. 
B)  to get involved. 
C)  whatever works. 
D)  allow them to do. 
A)  to make do. 
B)  to get involved. 
C)  whatever works. 
D)  allow them to do.

Question 18

If the government allowed a free market for transplant organs such as kidneys to exist,critics argue that such a market would

Accepted Answer

A)  not reduce the shortage of organs. 
B)  benefit rich people but not poor people. 
C)  be inefficient because markets are not good at allocating scarce resources. 
D)  be inferior to a plan imposed by a benevolent dictator. 
A)  not reduce the shortage of organs. 
B)  benefit rich people but not poor people. 
C)  be inefficient because markets are not good at allocating scarce resources. 
D)  be inferior to a plan imposed by a benevolent dictator.

Question 19

Figure 7-6
  
-Refer to Figure 7-6.What happens to the consumer surplus if the price rises from $100 to $150?

Accepted Answer

A)  The new consumer surplus is half of the original consumer surplus. 
B)  The new consumer surplus is 25 percent of the original consumer surplus. 
C)  The new consumer surplus is double the original consumer surplus. 
D)  The new consumer surplus is triple the original consumer surplus. 
A)  The new consumer surplus is half of the original consumer surplus. 
B)  The new consumer surplus is 25 percent of the original consumer surplus. 
C)  The new consumer surplus is double the original consumer surplus. 
D)  The new consumer surplus is triple the original consumer surplus.

Question 20

Suppose you buy an iPod for $100.If your consumer surplus is $30,your willingness to pay is $70.

Accepted Answer

A) True 
 B)False

Raisin bran and milk are complements.An increase in the price of raisins will

Kelly is willing to pay $68 for a pair of shoes for a wedding.She finds a pair at her favorite outlet shoe store for $58.Kelly's consumer surplus is

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

Figure 7-2 -Refer to Figure 7-2.When the price is P1,consumer surplus is

Figure 7-20 -Refer to Figure 7-20.If 4 units of the good are produced and sold,then

Table 7-9 The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality. -Refer to Table 7-9.The equilibrium market price for 10 piano lessons is $400.What is the total producer surplus in the market?

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.

If the United States legally allowed for a market in transplant organs,it is estimated that one kidney would sell for at least $100,000.

Jeff decides that he would pay as much as $2,000 for a new laptop computer.He buys the computer and realizes a consumer surplus of $300.How much did Jeff pay for his computer?

If a market is in equilibrium,then it is impossible for a social planner to raise economic welfare by increasing or decreasing the quantity of the good.

Figure 7-17 -Refer to Figure 7-17.Which area represents producer surplus when the price is P1?

Figure 7-9 -Refer to Figure 7-9.If the supply curve is S and the demand curve shifts from D to D',what is the increase in producer surplus due to new producers entering the market?

Suppose there is an increase in supply that reduces market price.Consumer surplus increases because (1)consumer surplus received by existing buyers increases and (2)new buyers enter the market.

Table 7-9 The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality. -Refer to Table 7-9.The equilibrium market price for 10 piano lessons is $300.What is the total producer surplus in the market?

Laissez-faire is a French expression which literally means

If the government allowed a free market for transplant organs such as kidneys to exist,critics argue that such a market would

Figure 7-6 -Refer to Figure 7-6.What happens to the consumer surplus if the price rises from $100 to $150?

Suppose you buy an iPod for $100.If your consumer surplus is $30,your willingness to pay is $70.

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

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

Raisin bran and milk are complements.An increase in the price of raisins will

Kelly is willing to pay $68 for a pair of shoes for a wedding.She finds a pair at her favorite outlet shoe store for $58.Kelly's consumer surplus is

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

Figure 7-2 -Refer to Figure 7-2.When the price is P1,consumer surplus is

Figure 7-20 -Refer to Figure 7-20.If 4 units of the good are produced and sold,then

Table 7-9 The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality. -Refer to Table 7-9.The equilibrium market price for 10 piano lessons is $400.What is the total producer surplus in the market?

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.

If the United States legally allowed for a market in transplant organs,it is estimated that one kidney would sell for at least $100,000.

Jeff decides that he would pay as much as $2,000 for a new laptop computer.He buys the computer and realizes a consumer surplus of $300.How much did Jeff pay for his computer?

If a market is in equilibrium,then it is impossible for a social planner to raise economic welfare by increasing or decreasing the quantity of the good.

Figure 7-17 -Refer to Figure 7-17.Which area represents producer surplus when the price is P1?

Figure 7-9 -Refer to Figure 7-9.If the supply curve is S and the demand curve shifts from D to D',what is the increase in producer surplus due to new producers entering the market?

Suppose there is an increase in supply that reduces market price.Consumer surplus increases because (1)consumer surplus received by existing buyers increases and (2)new buyers enter the market.

Table 7-9 The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality. -Refer to Table 7-9.The equilibrium market price for 10 piano lessons is $300.What is the total producer surplus in the market?

Laissez-faire is a French expression which literally means

If the government allowed a free market for transplant organs such as kidneys to exist,critics argue that such a market would

Figure 7-6 -Refer to Figure 7-6.What happens to the consumer surplus if the price rises from $100 to $150?

Suppose you buy an iPod for $100.If your consumer surplus is $30,your willingness to pay is $70.

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