Question 1

Inefficiency exists in an economy when a good is

Accepted Answer

A)  being produced with less than all available resources. 
B)  not distributed fairly among buyers. 
C)  not being produced by the lowest-cost producers. 
D)  being consumed by buyers who value it most highly. 
A)  being produced with less than all available resources. 
B)  not distributed fairly among buyers. 
C)  not being produced by the lowest-cost producers. 
D)  being consumed by buyers who value it most highly.

Question 2

The 2005 Boston Globe article discussing ticket scalping points out that the price people will pay for tickets will rise when

Accepted Answer

A)  supply and demand are both limited. 
B)  supply is limited and demand is not limited. 
C)  supply is limited and demand is not limited 
D)  supply and demand are both not limited. 
A)  supply and demand are both limited. 
B)  supply is limited and demand is not limited. 
C)  supply is limited and demand is not limited 
D)  supply and demand are both not limited.

Question 3

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 4

Table 7-11
  
-Refer to Table 7-11.The equilibrium price is

Accepted Answer

A)  $10.00. 
B)  $8.00. 
C)  $6.00. 
D)  $4.00. 
A)  $10.00. 
B)  $8.00. 
C)  $6.00. 
D)  $4.00.

Question 5

Table 7-8
The only four producers in a market have the following costs:
  
-Refer to Table 7-8.If the sellers bid against each other for the right to sell the good to a consumer,then the good will sell for

Accepted Answer

A)  $50 or slightly more. 
B)  $100 or slightly less. 
C)  $150 or slightly less. 
D)  $200 or slightly more. 
A)  $50 or slightly more. 
B)  $100 or slightly less. 
C)  $150 or slightly less. 
D)  $200 or slightly more.

Question 6

Consumer surplus is equal to the

Accepted Answer

A)  Value to buyers - Amount paid by buyers. 
B)  Amount paid by buyers - Costs of sellers. 
C)  Value to buyers - Costs of sellers. 
D)  Value to buyers - Willingness to pay of buyers. 
A)  Value to buyers - Amount paid by buyers. 
B)  Amount paid by buyers - Costs of sellers. 
C)  Value to buyers - Costs of sellers. 
D)  Value to buyers - Willingness to pay of buyers.

Question 7

Figure 7-17
  
-Refer to Figure 7-17.When the price is P1,area B represents

Accepted Answer

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

Question 8

Consumer surplus is a good measure of economic welfare if policymakers want to

Accepted Answer

A)  maximize total benefit. 
B)  minimize deadweight loss. 
C)  respect the preferences of sellers. 
D)  respect the preferences of buyers. 
A)  maximize total benefit. 
B)  minimize deadweight loss. 
C)  respect the preferences of sellers. 
D)  respect the preferences of buyers.

Question 9

Figure 7-15
  
-Refer to Figure 7-15.At the equilibrium price,total surplus is

Accepted Answer

A)  $150. 
B)  $200. 
C)  $250. 
D)  $300. 
A)  $150. 
B)  $200. 
C)  $250. 
D)  $300.

Question 10

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.Michael and Earvin each offer to pay $360 for a ticket,and you sell them the two tickets.What is the total consumer surplus in the market?

Accepted Answer

A)  $720 
B)  $180 
C)  $140 
D)  $40 
A)  $720 
B)  $180 
C)  $140 
D)  $40

Question 11

A buyer is willing to buy a product at a price greater than or equal to his willingness to pay,but would refuse to buy a product at a price less than his willingness to pay.

Accepted Answer

A) True 
 B)False

Question 12

Table 7-9
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
  
-Refer to Table 7-9.You wish to purchase 10 piano lessons for yourself and for your brother,so you take bids from each of the sellers.You will take lessons at the same time,so one teacher cannot provide lessons to both of you.You must pay the same price for both sets of lessons,and you will not accept a bid below a seller's cost because you are concerned that the seller will not provide all 10 lessons.What bid will you accept?

Accepted Answer

A)  $351 
B)  $349 
C)  $201 
D)  $199 
A)  $351 
B)  $349 
C)  $201 
D)  $199

Question 13

If Gina sells a shirt for $40,and her producer surplus from the sale is $32,her cost must have been

Accepted Answer

A)  $72. 
B)  $32. 
C)  $8. 
D)  We would have to know the consumer surplus in order to make this determination. 
A)  $72. 
B)  $32. 
C)  $8. 
D)  We would have to know the consumer surplus in order to make this determination.

Question 14

Cameron visits a sporting goods store to buy a new set of golf clubs.He is willing to pay $750 for the clubs but buys them on sale for $575.Cameron's consumer surplus from the purchase is

Accepted Answer

A)  $175. 
B)  $575. 
C)  $750. 
D)  $1,325. 
A)  $175. 
B)  $575. 
C)  $750. 
D)  $1,325.

Question 15

Table 7-3
The only four consumers in a market have the following willingness to pay for a good:
  
-Refer to Table 7-3.If the price is $20,then consumer surplus in the market is

Accepted Answer

A)  $20, and Wilbur and Ming-la purchase the good. 
B)  $45, and Carlos and Quilana purchase the good. 
C)  $45, and Quilana, Wilbur, and Ming-la purchase the good. 
D)  $55, and Carlos, Wilbur, and Ming-la purchase the good. 
A)  $20, and Wilbur and Ming-la purchase the good. 
B)  $45, and Carlos and Quilana purchase the good. 
C)  $45, and Quilana, Wilbur, and Ming-la purchase the good. 
D)  $55, and Carlos, Wilbur, and Ming-la purchase the good.

Question 16

Table 7-8
The only four producers in a market have the following costs:
  
-Refer to Table 7-8.If Evan,Selena,Angie,and Kris sell the good,and the resulting producer surplus is $700,then the price must have been

Accepted Answer

A)  $200. 
B)  $300. 
C)  $500. 
D)  $700. 
A)  $200. 
B)  $300. 
C)  $500. 
D)  $700.

Question 17

The marginal seller is the seller who

Accepted Answer

A)  cannot compete with the other sellers in the market. 
B)  would leave the market first if the price were any lower. 
C)  can produce at the lowest cost. 
D)  has the largest producer surplus. 
A)  cannot compete with the other sellers in the market. 
B)  would leave the market first if the price were any lower. 
C)  can produce at the lowest cost. 
D)  has the largest producer surplus.

Question 18

If the current allocation of resources in the market for wallpaper is efficient,then it must be the case that

Accepted Answer

A)  producer surplus equals consumer surplus in the market for wallpaper. 
B)  the market for wallpaper is in equilibrium. 
C)  on the last unit of wallpaper that was produced and sold, the value to buyers exceeded the cost to sellers. 
D)  All of the above are correct. 
A)  producer surplus equals consumer surplus in the market for wallpaper. 
B)  the market for wallpaper is in equilibrium. 
C)  on the last unit of wallpaper that was produced and sold, the value to buyers exceeded the cost to sellers. 
D)  All of the above are correct.

Question 19

All else equal,an increase in supply will cause an increase in consumer surplus.

Accepted Answer

A) True 
 B)False

Question 20

If producing a soccer ball costs Jake $5,and he sells it for $40,his producer surplus is $35.

Accepted Answer

A) True 
 B)False

Inefficiency exists in an economy when a good is

The 2005 Boston Globe article discussing ticket scalping points out that the price people will pay for tickets will rise when

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

Table 7-11 -Refer to Table 7-11.The equilibrium price is

Table 7-8 The only four producers in a market have the following costs: -Refer to Table 7-8.If the sellers bid against each other for the right to sell the good to a consumer,then the good will sell for

Consumer surplus is equal to the

Figure 7-17 -Refer to Figure 7-17.When the price is P1,area B represents

Consumer surplus is a good measure of economic welfare if policymakers want to

Figure 7-15 -Refer to Figure 7-15.At the equilibrium price,total surplus is

A buyer is willing to buy a product at a price greater than or equal to his willingness to pay,but would refuse to buy a product at a price less than his willingness to pay.

If Gina sells a shirt for $40,and her producer surplus from the sale is $32,her cost must have been

Cameron visits a sporting goods store to buy a new set of golf clubs.He is willing to pay $750 for the clubs but buys them on sale for $575.Cameron's consumer surplus from the purchase is

Table 7-3 The only four consumers in a market have the following willingness to pay for a good: -Refer to Table 7-3.If the price is $20,then consumer surplus in the market is

Table 7-8 The only four producers in a market have the following costs: -Refer to Table 7-8.If Evan,Selena,Angie,and Kris sell the good,and the resulting producer surplus is $700,then the price must have been

The marginal seller is the seller who

If the current allocation of resources in the market for wallpaper is efficient,then it must be the case that

All else equal,an increase in supply will cause an increase in consumer surplus.

If producing a soccer ball costs Jake $5,and he sells it for $40,his producer surplus is $35.

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.

Inefficiency exists in an economy when a good is

The 2005 Boston Globe article discussing ticket scalping points out that the price people will pay for tickets will rise when

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

Table 7-11 -Refer to Table 7-11.The equilibrium price is

Table 7-8 The only four producers in a market have the following costs: -Refer to Table 7-8.If the sellers bid against each other for the right to sell the good to a consumer,then the good will sell for

Consumer surplus is equal to the

Figure 7-17 -Refer to Figure 7-17.When the price is P1,area B represents

Consumer surplus is a good measure of economic welfare if policymakers want to

Figure 7-15 -Refer to Figure 7-15.At the equilibrium price,total surplus is

A buyer is willing to buy a product at a price greater than or equal to his willingness to pay,but would refuse to buy a product at a price less than his willingness to pay.

If Gina sells a shirt for $40,and her producer surplus from the sale is $32,her cost must have been

Cameron visits a sporting goods store to buy a new set of golf clubs.He is willing to pay $750 for the clubs but buys them on sale for $575.Cameron's consumer surplus from the purchase is

Table 7-3 The only four consumers in a market have the following willingness to pay for a good: -Refer to Table 7-3.If the price is $20,then consumer surplus in the market is

Table 7-8 The only four producers in a market have the following costs: -Refer to Table 7-8.If Evan,Selena,Angie,and Kris sell the good,and the resulting producer surplus is $700,then the price must have been

The marginal seller is the seller who

If the current allocation of resources in the market for wallpaper is efficient,then it must be the case that

All else equal,an increase in supply will cause an increase in consumer surplus.

If producing a soccer ball costs Jake $5,and he sells it for $40,his producer surplus is $35.

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