Question 1

Figure 7-21
  
-Refer to Figure 7-21.If the government mandated a price increase from P1 to a higher price,then

Accepted Answer

A)  total surplus would decrease. 
B)  consumer surplus would increase. 
C)  total surplus would increase, since producer surplus would increase. 
D)  total surplus would remain unchanged. 
A)  total surplus would decrease. 
B)  consumer surplus would increase. 
C)  total surplus would increase, since producer surplus would increase. 
D)  total surplus would remain unchanged.

Question 2

Figure 7-12
  
-Refer to Figure 7-12.When the price rises from P1 to P2,what area represents the increase in producer surplus?

Accepted Answer

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

Question 3

Total surplus in a market is consumer surplus minus producer surplus.

Accepted Answer

A) True 
 B)False

Question 4

Total surplus in a market will increase when the government

Accepted Answer

A)  imposes a binding price floor or a binding price ceiling on that market. 
B)  imposes a tax on that market. 
C)  Both a and b are correct. 
D)  Neither a nor b is correct. 
A)  imposes a binding price floor or a binding price ceiling on that market. 
B)  imposes a tax on that market. 
C)  Both a and b are correct. 
D)  Neither a nor b is correct.

Question 5

Figure 7-19
  
-Refer to Figure 7-19.If the price were P1,producer surplus would be represented by the area

Accepted Answer

A)  F. 
B)  F+G. 
C)  D+H+F. 
D)  D+H+F+G+I. 
A)  F. 
B)  F+G. 
C)  D+H+F. 
D)  D+H+F+G+I.

Question 6

A seller is willing to sell a product only if the seller receives a price that is at least as great as the

Accepted Answer

A)  seller's producer surplus. 
B)  seller's cost of production. 
C)  seller's profit. 
D)  average willingness to pay of buyers of the product. 
A)  seller's producer surplus. 
B)  seller's cost of production. 
C)  seller's profit. 
D)  average willingness to pay of buyers of the product.

Question 7

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 market price for the good is $20,who will purchase the good?

Accepted Answer

A)  Ming-la only 
B)  Carlos and Quilana only 
C)  Quilana and Wilbur only 
D)  Quilana, Wilbur, and Ming-la only 
A)  Ming-la only 
B)  Carlos and Quilana only 
C)  Quilana and Wilbur only 
D)  Quilana, Wilbur, and Ming-la only

Question 8

Table 7-10
  
-Refer to Table 7-10.You and your best friend want to hire a professional photographer to take pictures of your two families.The table shows the costs of the four potential sellers in the local photography market.You and your friend take bids from the sellers.Who offers the two winning bids,and what do they offer to charge for the photography sessions?

Accepted Answer

A)  LeBron and Kobe; more than $450 but less than $600 
B)  Kevin and Steve; more than $450 but less than $600 
C)  LeBron and Kobe; more than $700 
D)  Kevin and Steve; less than $400 
A)  LeBron and Kobe; more than $450 but less than $600 
B)  Kevin and Steve; more than $450 but less than $600 
C)  LeBron and Kobe; more than $700 
D)  Kevin and Steve; less than $400

Question 9

Figure 7-13
  
-Refer to Figure 7-13.Suppose the price of the good is $400.Then,on the first unit of the good that is sold,producer surplus amounts to

Accepted Answer

A)  $200. 
B)  $300. 
C)  $400. 
D)  $450. 
A)  $200. 
B)  $300. 
C)  $400. 
D)  $450.

Question 10

Which of the following will cause no change in producer surplus?

Accepted Answer

A)  the imposition of a nonbinding price ceiling in the market 
B)  buyers expect the price of a good to be higher next month 
C)  the price of a substitute increases 
D)  income increases and buyers consider the good to be inferior 
A)  the imposition of a nonbinding price ceiling in the market 
B)  buyers expect the price of a good to be higher next month 
C)  the price of a substitute increases 
D)  income increases and buyers consider the good to be inferior

Question 11

If producing a soccer ball costs Jake $5,and he sells it for $40,his producer surplus is $45.

Accepted Answer

A) True 
 B)False

Question 12

Table 7-7
The following table represents the costs of five possible sellers.
  
-Refer to Table 7-7.If the market price is $900,the producer surplus in the market is

Accepted Answer

A)  $350. 
B)  $550. 
C)  $750. 
D)  $1,000. 
A)  $350. 
B)  $550. 
C)  $750. 
D)  $1,000.

Question 13

Producer surplus is

Accepted Answer

A)  measured using the demand curve for a good. 
B)  always a negative number for sellers in a competitive market. 
C)  the amount a seller is paid minus the cost of production. 
D)  the opportunity cost of production minus the cost of producing goods that go unsold. 
A)  measured using the demand curve for a good. 
B)  always a negative number for sellers in a competitive market. 
C)  the amount a seller is paid minus the cost of production. 
D)  the opportunity cost of production minus the cost of producing goods that go unsold.

Question 14

Willingness to pay

Accepted Answer

A)  measures the value that a buyer places on a good. 
B)  is the amount a seller actually receives for a good minus the minimum amount the seller is willing to accept. 
C)  is the maximum amount a buyer is willing to pay minus the minimum amount a seller is willing to accept. 
D)  is the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. 
A)  measures the value that a buyer places on a good. 
B)  is the amount a seller actually receives for a good minus the minimum amount the seller is willing to accept. 
C)  is the maximum amount a buyer is willing to pay minus the minimum amount a seller is willing to accept. 
D)  is the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.

Question 15

Producer surplus measures the benefit to sellers from receiving a price above their costs.

Accepted Answer

A) True 
 B)False

Question 16

Kristi and Rebecca sell lemonade on the corner.It costs them 7 cents to make each cup.On a certain day,they sell 40 cups.Their producer surplus for that day amounts to $19.20.Kristi & Rebecca sold each cup for

Accepted Answer

A)  31 cents. 
B)  38 cents. 
C)  45 cents. 
D)  55 cents. 
A)  31 cents. 
B)  38 cents. 
C)  45 cents. 
D)  55 cents.

Question 17

Figure 7-18
  
-Refer to Figure 7-18.At the equilibrium price,producer surplus is

Accepted Answer

A)  $480. 
B)  $640. 
C)  $1,120. 
D)  $1,280. 
A)  $480. 
B)  $640. 
C)  $1,120. 
D)  $1,280.

Question 18

Figure 7-10
  
-Refer to Figure 7-10.If the equilibrium price is $50,what is the producer surplus?

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 19

If a market is allowed to move freely to its equilibrium price and quantity,then an increase in supply will

Accepted Answer

A)  increase consumer surplus. 
B)  reduce consumer surplus. 
C)  not affect consumer surplus. 
D)  Any of the above are possible. 
A)  increase consumer surplus. 
B)  reduce consumer surplus. 
C)  not affect consumer surplus. 
D)  Any of the above are possible.

Question 20

Figure 7-19
  
-Refer to Figure 7-19.At equilibrium,producer surplus is represented by the area

Accepted Answer

A)  F. 
B)  F+G. 
C)  D+H+F. 
D)  D+H+F+G+I. 
A)  F. 
B)  F+G. 
C)  D+H+F. 
D)  D+H+F+G+I.

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

Figure 7-21 -Refer to Figure 7-21.If the government mandated a price increase from P1 to a higher price,then

Figure 7-12 -Refer to Figure 7-12.When the price rises from P1 to P2,what area represents the increase in producer surplus?

Total surplus in a market is consumer surplus minus producer surplus.

Total surplus in a market will increase when the government

Figure 7-19 -Refer to Figure 7-19.If the price were P1,producer surplus would be represented by the area

A seller is willing to sell a product only if the seller receives a price that is at least as great as the

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 market price for the good is $20,who will purchase the good?

Figure 7-13 -Refer to Figure 7-13.Suppose the price of the good is $400.Then,on the first unit of the good that is sold,producer surplus amounts to

Which of the following will cause no change in producer surplus?

If producing a soccer ball costs Jake $5,and he sells it for $40,his producer surplus is $45.

Table 7-7 The following table represents the costs of five possible sellers. -Refer to Table 7-7.If the market price is $900,the producer surplus in the market is

Producer surplus is

Willingness to pay

Producer surplus measures the benefit to sellers from receiving a price above their costs.

Kristi and Rebecca sell lemonade on the corner.It costs them 7 cents to make each cup.On a certain day,they sell 40 cups.Their producer surplus for that day amounts to $19.20.Kristi & Rebecca sold each cup for

Figure 7-18 -Refer to Figure 7-18.At the equilibrium price,producer surplus is

Figure 7-10 -Refer to Figure 7-10.If the equilibrium price is $50,what is the producer surplus?

If a market is allowed to move freely to its equilibrium price and quantity,then an increase in supply will

Figure 7-19 -Refer to Figure 7-19.At equilibrium,producer surplus is represented by the area

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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