Question 1

A simultaneous decrease in both the demand for MP3 players and the supply of MP3 players would imply that

Accepted Answer

A)  both the value of MP3 players to consumers and the cost of producing MP3 players has increased. 
B)  both the value of MP3 players to consumers and the cost of producing MP3 players has decreased. 
C)  the value of MP3 players to consumers has decreased, and the cost of producing MP3 players has increased. 
D)  the value of MP3 players to consumers has increased, and the cost of producing MP3 players has decreased. 
A)  both the value of MP3 players to consumers and the cost of producing MP3 players has increased. 
B)  both the value of MP3 players to consumers and the cost of producing MP3 players has decreased. 
C)  the value of MP3 players to consumers has decreased, and the cost of producing MP3 players has increased. 
D)  the value of MP3 players to consumers has increased, and the cost of producing MP3 players has decreased.

Question 2

If the demand for light bulbs increases,producer surplus in the market for light bulbs

Accepted Answer

A)  increases. 
B)  decreases. 
C)  remains the same. 
D)  may increase, decrease, or remain the same. 
A)  increases. 
B)  decreases. 
C)  remains the same. 
D)  may increase, decrease, or remain the same.

Question 3

Total surplus in a market is equal to

Accepted Answer

A)  value to buyers - amount paid by buyers. 
B)  amount received by sellers - costs of sellers. 
C)  value to buyers - costs of sellers. 
D)  amount received by sellers - amount paid by buyers. 
A)  value to buyers - amount paid by buyers. 
B)  amount received by sellers - costs of sellers. 
C)  value to buyers - costs of sellers. 
D)  amount received by sellers - amount paid by buyers.

Question 4

The consumption of water by local residents that may include pesticide runoff from local farmers' fields is an example of

Accepted Answer

A)  market equilibrium. 
B)  market power. 
C)  externalities. 
D)  laissez-faire. 
A)  market equilibrium. 
B)  market power. 
C)  externalities. 
D)  laissez-faire.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Figure 7-12
  
-Refer to Figure 7-12.When the price falls from P2 to P1,producer surplus

Accepted Answer

A)  decreases by an amount equal to C. 
B)  decreases by an amount equal to A+B. 
C)  decreases by an amount equal to A+C. 
D)  increases by an amount equal to A+B 
A)  decreases by an amount equal to C. 
B)  decreases by an amount equal to A+B. 
C)  decreases by an amount equal to A+C. 
D)  increases by an amount equal to A+B

Question 7

Total surplus is

Accepted Answer

A)  the total cost to sellers of providing the good minus the total value of the good to buyers. 
B)  the total value of the good to buyers minus the cost to sellers of providing the good. 
C)  the difference between consumer surplus and sellers' cost. 
D)  always smaller than producer surplus. 
A)  the total cost to sellers of providing the good minus the total value of the good to buyers. 
B)  the total value of the good to buyers minus the cost to sellers of providing the good. 
C)  the difference between consumer surplus and sellers' cost. 
D)  always smaller than producer surplus.

Question 8

Economists tend to see ticket scalping as

Accepted Answer

A)  a way for a few to profit without producing anything of value. 
B)  an inequitable interference in the orderly process of ticket distribution. 
C)  a way of increasing the efficiency of ticket distribution. 
D)  an unproductive activity which should be made illegal everywhere. 
A)  a way for a few to profit without producing anything of value. 
B)  an inequitable interference in the orderly process of ticket distribution. 
C)  a way of increasing the efficiency of ticket distribution. 
D)  an unproductive activity which should be made illegal everywhere.

Question 9

Welfare economics is the study of

Accepted Answer

A)  the well-being of less fortunate people. 
B)  welfare programs in the United States. 
C)  how the allocation of resources affects economic well-being. 
D)  the effect of income redistribution on work effort. 
A)  the well-being of less fortunate people. 
B)  welfare programs in the United States. 
C)  how the allocation of resources affects economic well-being. 
D)  the effect of income redistribution on work effort.

Question 10

Which of the following equations is valid?

Accepted Answer

A)  Consumer surplus = Total surplus - Cost to sellers 
B)  Producer surplus = Total surplus - Consumer surplus 
C)  Total surplus = Value to buyers - Amount paid by buyers 
D)  Total surplus = Amount received by sellers - Cost to sellers 
A)  Consumer surplus = Total surplus - Cost to sellers 
B)  Producer surplus = Total surplus - Consumer surplus 
C)  Total surplus = Value to buyers - Amount paid by buyers 
D)  Total surplus = Amount received by sellers - Cost to sellers

Question 11

Figure 7-13
  
-Refer to Figure 7-13.If the price of the good is $600,then

Accepted Answer

A)  consumer surplus is $800. 
B)  consumer surplus is $900. 
C)  producer surplus is $900. 
D)  producer surplus is $1,000. 
A)  consumer surplus is $800. 
B)  consumer surplus is $900. 
C)  producer surplus is $900. 
D)  producer surplus is $1,000.

Question 12

Figure 7-13
  
-Refer to Figure 7-13.Sellers will be unwilling to sell more than

Accepted Answer

A)  1 unit of the good if its price is below $200. 
B)  2 units of the good if its price is below $450. 
C)  3 units of the good if its price is below $700. 
D)  All of the above are correct. 
A)  1 unit of the good if its price is below $200. 
B)  2 units of the good if its price is below $450. 
C)  3 units of the good if its price is below $700. 
D)  All of the above are correct.

Question 13

Table 7-7
The following table represents the costs of five possible sellers.
  
-Refer to Table 7-7.If the price is $775,who would be willing to supply the product?

Accepted Answer

A)  Abby and Bobby 
B)  Abby, Bobby, and Carlos 
C)  Carlos, Dianne, and Evalina 
D)  Dianne and Evalina 
A)  Abby and Bobby 
B)  Abby, Bobby, and Carlos 
C)  Carlos, Dianne, and Evalina 
D)  Dianne and Evalina

Question 14

Figure 7-20
  
-Refer to Figure 7-20.At equilibrium,producer surplus is measured by the area

Accepted Answer

A)  ACG. 
B)  AFG. 
C)  KBG. 
D)  CFG. 
A)  ACG. 
B)  AFG. 
C)  KBG. 
D)  CFG.

Question 15

Consumer surplus is the

Accepted Answer

A)  amount of a good consumers get without paying anything. 
B)  amount a consumer pays minus the amount the consumer is willing to pay. 
C)  amount a consumer is willing to pay minus the amount the consumer actually pays. 
D)  value of a good to a consumer. 
A)  amount of a good consumers get without paying anything. 
B)  amount a consumer pays minus the amount the consumer is willing to pay. 
C)  amount a consumer is willing to pay minus the amount the consumer actually pays. 
D)  value of a good to a consumer.

Question 16

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

Accepted Answer

A)  $17. 
B)  $22. 
C)  $25. 
D)  $28. 
A)  $17. 
B)  $22. 
C)  $25. 
D)  $28.

Question 17

Bill created a new software program he is willing to sell for $200.He sells his first copy and enjoys a producer surplus of $150.What is the price paid for the software?

Accepted Answer

A)  $50. 
B)  $150. 
C)  $200. 
D)  $350. 
A)  $50. 
B)  $150. 
C)  $200. 
D)  $350.

Question 18

Efficiency is related to the size of the economic pie,whereas equality is related to how the pie gets sliced and distributed.

Accepted Answer

A) True 
 B)False

Question 19

A drought in California destroys many red grapes.As a result of the drought,the consumer surplus in the market for red grapes

Accepted Answer

A)  increases, and the consumer surplus in the market for red wine increases. 
B)  increases, and the consumer surplus in the market for red wine decreases. 
C)  decreases, and the consumer surplus in the market for red wine increases. 
D)  decreases, and the consumer surplus in the market for red wine decreases. 
A)  increases, and the consumer surplus in the market for red wine increases. 
B)  increases, and the consumer surplus in the market for red wine decreases. 
C)  decreases, and the consumer surplus in the market for red wine increases. 
D)  decreases, and the consumer surplus in the market for red wine decreases.

Question 20

Table 7-6
  
-Refer to Table 7-6.You are selling 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.Which of the following graphs represents the market demand curve?

Accepted Answer

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

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

A simultaneous decrease in both the demand for MP3 players and the supply of MP3 players would imply that

If the demand for light bulbs increases,producer surplus in the market for light bulbs

Total surplus in a market is equal to

The consumption of water by local residents that may include pesticide runoff from local farmers' fields is an example of

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

Figure 7-12 -Refer to Figure 7-12.When the price falls from P2 to P1,producer surplus

Total surplus is

Economists tend to see ticket scalping as

Welfare economics is the study of

Which of the following equations is valid?

Figure 7-13 -Refer to Figure 7-13.If the price of the good is $600,then

Figure 7-13 -Refer to Figure 7-13.Sellers will be unwilling to sell more than

Table 7-7 The following table represents the costs of five possible sellers. -Refer to Table 7-7.If the price is $775,who would be willing to supply the product?

Figure 7-20 -Refer to Figure 7-20.At equilibrium,producer surplus is measured by the area

Consumer surplus is the

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

Bill created a new software program he is willing to sell for $200.He sells his first copy and enjoys a producer surplus of $150.What is the price paid for the software?

Efficiency is related to the size of the economic pie,whereas equality is related to how the pie gets sliced and distributed.

A drought in California destroys many red grapes.As a result of the drought,the consumer surplus in the market for red grapes

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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