Exam 7: Consumers, producers, and the Efficiency of Markets

This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. Table 7-2 -Refer to Table 7-2.If the price of Vanilla Coke is $6.90,who will purchase the good?

If the demand for a good or service decreases,producer surplus

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

According to many economists,government restrictions on ticket scalping do all of the following except

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

Producer surplus directly measures

Producer surplus is the amount a seller is paid minus the cost of production.

Shannon buys a new CD player for her car for $135.She receives consumer surplus of $25 on her purchase if her willingness to pay is

Ray buys a new tractor for $118,000.He receives consumer surplus of $13,000 on his purchase.Ray's willingness to pay is

Suppose your own demand curve for tomatoes slopes downward.Suppose also that,for the last tomato you bought this week,you paid a price exactly equal to your willingness to pay.Then

Suppose the market demand curve for a good passes through the point (quantity demanded = 100,price = $25).If there are five buyers in the market,then

Figure 7-11. On the graph below, Q represents the quantity of the good and P represents the good's price. -Refer to Figure 7-11.At the equilibrium,total surplus is measured by the area

Figure 7-5. On the graph below, Q represents the quantity of the good and P represents the good's price. -Refer to Figure 7-5.If the price of the good is $14,then producer surplus is

Which of the following equations is valid?

The area below the price and above the supply curve measures the producer surplus in a market.

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

Sally sharpens knives in her spare time for extra income.Buyers of her service are willing to pay $2.50 per knife for as many knives as Sally is willing to sharpen.On a particular day,she is willing to sharpen the first knife for $1.75,the second knife for $2.25,the third knife for $2.75,and the fourth knife for $3.25.Assume Sally is rational in deciding how many knives to sharpen.Her producer surplus is

What happens to consumer surplus if the price of a good increases?

Table 7-3 For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day. -Refer to Table 7-3.If the market price of an orange is $1.20,the market quantity of oranges demanded per day is

Figure 7-2 -Refer to Figure 7-2.Which area represents the increase in consumer surplus when the price falls from P₁ to P₂?