Question 1

Total surplus is equal to

Accepted Answer

A)  value to buyers - profit to sellers. 
B)  value to buyers - cost to sellers. 
C)  consumer surplus x producer surplus. 
D)  (consumer surplus + producer surplus) x equilibrium quantity. 
A)  value to buyers - profit to sellers. 
B)  value to buyers - cost to sellers. 
C)  consumer surplus x producer surplus. 
D)  (consumer surplus + producer surplus) x equilibrium quantity.

Question 2

An example of positive analysis is studying

Accepted Answer

A)  how market forces produce equilibrium. 
B)  whether equilibrium outcomes are fair. 
C)  whether equilibrium outcomes are socially desirable. 
D)  if income distributions are fair. 
A)  how market forces produce equilibrium. 
B)  whether equilibrium outcomes are fair. 
C)  whether equilibrium outcomes are socially desirable. 
D)  if income distributions are fair.

Question 3

Consumer surplus is the amount a buyer is willing to pay for a good minus the amount the buyer actually has to pay for it.

Accepted Answer

A) True 
 B)False

Question 4

If Darby values a soccer ball at $50,and she pays $40 for it,her consumer surplus is $90.

Accepted Answer

A) True 
 B)False

Question 5

Figure 7-20
  
-Refer to Figure 7-20.At equilibrium,total 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 6

Michael values a stainless steel refrigerator for his new house at $3,500,but he succeeds in buying one for $3,000.Michael's willingness to pay is

Accepted Answer

A)  $500. 
B)  $3,000. 
C)  $3,500. 
D)  $6,500. 
A)  $500. 
B)  $3,000. 
C)  $3,500. 
D)  $6,500.

Question 7

Which of the following will cause a decrease in producer surplus?

Accepted Answer

A)  the imposition of a binding price ceiling in the market 
B)  an increase in the number of buyers of the good 
C)  income increases and buyers consider the good to be normal 
D)  the price of a complement decreases 
A)  the imposition of a binding price ceiling in the market 
B)  an increase in the number of buyers of the good 
C)  income increases and buyers consider the good to be normal 
D)  the price of a complement decreases

Question 8

Total surplus measures the

Accepted Answer

A)  loss to buyers from paying higher prices plus the benefit to sellers from receiving lower prices. 
B)  buyers' willingnesses to pay less the sellers' costs. 
C)  fairness of the distribution of resources in society. 
D)  value to the government of goods and services sold in society. 
A)  loss to buyers from paying higher prices plus the benefit to sellers from receiving lower prices. 
B)  buyers' willingnesses to pay less the sellers' costs. 
C)  fairness of the distribution of resources in society. 
D)  value to the government of goods and services sold in society.

Question 9

Economists typically measure efficiency using

Accepted Answer

A)  the price paid by buyers. 
B)  the quantity supplied by sellers. 
C)  total surplus. 
D)  profits to firms. 
A)  the price paid by buyers. 
B)  the quantity supplied by sellers. 
C)  total surplus. 
D)  profits to firms.

Question 10

Figure 7-15
  
-Refer to Figure 7-15.If the government imposes a price ceiling of $60 in this market,then total surplus will be

Accepted Answer

A)  $187.50. 
B)  $212.50. 
C)  $250.00. 
D)  $266.67. 
A)  $187.50. 
B)  $212.50. 
C)  $250.00. 
D)  $266.67.

Question 11

Consumer surplus is

Accepted Answer

A)  the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. 
B)  the amount a buyer is willing to pay for a good minus the cost of producing the good. 
C)  the amount by which the quantity supplied of a good exceeds the quantity demanded of the good. 
D)  a buyer's willingness to pay for a good plus the price of the good. 
A)  the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. 
B)  the amount a buyer is willing to pay for a good minus the cost of producing the good. 
C)  the amount by which the quantity supplied of a good exceeds the quantity demanded of the good. 
D)  a buyer's willingness to pay for a good plus the price of the good.

Question 12

Which of the following will cause an increase in producer surplus?

Accepted Answer

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

Question 13

What happens to consumer surplus in the iPod market if iPods are normal goods and buyers of iPods experience an increase in income?

Accepted Answer

A)  Consumer surplus decreases. 
B)  Consumer surplus remains unchanged. 
C)  Consumer surplus increases. 
D)  Consumer surplus may increase, decrease, or remain unchanged. 
A)  Consumer surplus decreases. 
B)  Consumer surplus remains unchanged. 
C)  Consumer surplus increases. 
D)  Consumer surplus may increase, decrease, or remain unchanged.

Question 14

If Rosa is willing to pay $450 for hockey tickets and has consumer surplus of $175,the price of the tickets is $625.

Accepted Answer

A) True 
 B)False

Question 15

Table 7-6
  
-Refer to Table 7-6.You have an extra ticket 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 ticket.Who makes the winning bid,and what does he offer to pay for the ticket?

Accepted Answer

A)  Michael; $501 
B)  Michael; more than $400 but less than or equal to $500 
C)  Earvin; $400 
D)  Earvin; more than $350 but less than or equal to $400 
A)  Michael; $501 
B)  Michael; more than $400 but less than or equal to $500 
C)  Earvin; $400 
D)  Earvin; more than $350 but less than or equal to $400

Question 16

Figure 7-21
  
-Refer to Figure 7-21.Buyers who value this good less than the equilibrium price are represented by which line segment?

Accepted Answer

A)  AC. 
B)  CK. 
C)  BC. 
D)  CH. 
A)  AC. 
B)  CK. 
C)  BC. 
D)  CH.

Question 17

Suppose the demand for peaches decreases.What will happen to producer surplus in the market for peaches?

Accepted Answer

A)  It increases. 
B)  It decreases. 
C)  It remains unchanged. 
D)  It may increase, decrease, or remain unchanged. 
A)  It increases. 
B)  It decreases. 
C)  It remains unchanged. 
D)  It may increase, decrease, or remain unchanged.

Question 18

Suppose you sell a kayak for $600,but you were willing to sell it for $450.The buyer was willing to pay $650.The total surplus is $200.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A)  $80. 
B)  $100. 
C)  $120. 
D)  $135. 
A)  $80. 
B)  $100. 
C)  $120. 
D)  $135.

Question 20

The Surgeon General announces that eating apples promotes healthy teeth.As a result,the equilibrium price of apples

Accepted Answer

A)  increases, and producer surplus increases. 
B)  increases, and producer surplus decreases. 
C)  decreases, and producer surplus increases. 
D)  decreases, and producer surplus decreases. 
A)  increases, and producer surplus increases. 
B)  increases, and producer surplus decreases. 
C)  decreases, and producer surplus increases. 
D)  decreases, and producer surplus decreases.

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

Total surplus is equal to

An example of positive analysis is studying

Consumer surplus is the amount a buyer is willing to pay for a good minus the amount the buyer actually has to pay for it.

If Darby values a soccer ball at $50,and she pays $40 for it,her consumer surplus is $90.

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

Michael values a stainless steel refrigerator for his new house at $3,500,but he succeeds in buying one for $3,000.Michael's willingness to pay is

Which of the following will cause a decrease in producer surplus?

Total surplus measures the

Economists typically measure efficiency using

Figure 7-15 -Refer to Figure 7-15.If the government imposes a price ceiling of $60 in this market,then total surplus will be

Consumer surplus is

Which of the following will cause an increase in producer surplus?

What happens to consumer surplus in the iPod market if iPods are normal goods and buyers of iPods experience an increase in income?

If Rosa is willing to pay $450 for hockey tickets and has consumer surplus of $175,the price of the tickets is $625.

Figure 7-21 -Refer to Figure 7-21.Buyers who value this good less than the equilibrium price are represented by which line segment?

Suppose the demand for peaches decreases.What will happen to producer surplus in the market for peaches?

Suppose you sell a kayak for $600,but you were willing to sell it for $450.The buyer was willing to pay $650.The total surplus is $200.

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

The Surgeon General announces that eating apples promotes healthy teeth.As a result,the equilibrium price of apples

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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