Question 1

For any given quantity,the price on a demand curve represents the marginal buyer's willingness to pay.

Accepted Answer

A) True 
 B)False

Question 2

Free markets allocate (1) the supply of goods to the buyers who value them most highly and (2) the demand for goods to the sellers who can produce them at the least cost.

Accepted Answer

A) True 
 B)False

Question 3

Determine the amount of consumer surplus generated in each of the following situations.
a.Mary goes to the drugstore,where she is willing to pay up to $10 for a bottle of nail polish.She picks out one that she likes with a price of $9.99.When she is paying for it,she learns that the product has been discounted by 50 percent.
b.Mike goes to the used book store hoping to find a paperback copy of the Hunger Games for up to $10.The store has one copy selling for $10,which he purchases.
c.After dance rehearsal,Julie is willing to pay $2 for a bottle of mineral water.The corner store sells mineral water for $2.25 per bottle,so she declines to purchase it.

Accepted Answer

a.Mary's consumer surplus is $5.This is

Question 4

Figure 7-3
  
-Refer to Figure 7-3.Which area represents the increase in producer surplus when the price rises from P₁ to P₂ due to new producers entering the market

Accepted Answer

A) ACF 
B) BCE 
C) ABED 
D) DEF 
A) ACF 
B) BCE 
C) ABED 
D) DEF

Question 5

Suri is willing to pay $85 for a pair of shoes for her graduation banquet.She finds a pair at her favourite outlet shoe store for $62.What is Suri's consumer surplus

Accepted Answer

A) $23 
B) $46 
C) $62 
D) $85 
A) $23 
B) $46 
C) $62 
D) $85

Question 6

Nathan buys a new sound system for his dorm room for $500.He receives consumer surplus of $400 from the purchase.At what amount does Nathan value his sound system

Accepted Answer

A) $100 
B) $400 
C) $500 
D) $900 
A) $100 
B) $400 
C) $500 
D) $900

Question 7

Market demand is given as QD = 150 - 0.5P.Market supply is given as QS = 2P.In a perfectly competitive equilibrium,what will be the value of producer surplus

Accepted Answer

A) $3600 
B) $4800 
C) $ 5100 
D) $7200 
A) $3600 
B) $4800 
C) $ 5100 
D) $7200

Question 8

Denise values a stainless steel dishwasher for her new house at $700.The actual price of the dishwasher is $850.What will Denise do

Accepted Answer

A) buy the dishwasher and receive a consumer surplus of $150 
B) buy the dishwasher and receive a consumer surplus of $500 
C) not buy the dishwasher because her willingness to pay is greater than the price 
D) not buy the dishwasher because her willingness to pay is less than the price 
A) buy the dishwasher and receive a consumer surplus of $150 
B) buy the dishwasher and receive a consumer surplus of $500 
C) not buy the dishwasher because her willingness to pay is greater than the price 
D) not buy the dishwasher because her willingness to pay is less than the price

Question 9

Suppose Connor is willing to pay $400 for a new suit for his graduation,but is able to buy the suit for $350.What is his consumer surplus

Accepted Answer

A) $50 
B) $150 
C) $350 
D) $400 
A) $50 
B) $150 
C) $350 
D) $400

Question 10

According to many economists,what do government restrictions of ticket scalping NOT do

Accepted Answer

A) inconvenience the public 
B) reduce the audience for cultural and sports events 
C) waste the police's time 
D) keep the cost of tickets to consumers low 
A) inconvenience the public 
B) reduce the audience for cultural and sports events 
C) waste the police's time 
D) keep the cost of tickets to consumers low

Question 11

What do many economists believe that restrictions against ticket scalping will NOT cause

Accepted Answer

A) smaller audiences for cultural and sporting events 
B) less tax revenue for the province 
C) an increase in ticket prices 
D) fewer cultural and sporting events planned 
A) smaller audiences for cultural and sporting events 
B) less tax revenue for the province 
C) an increase in ticket prices 
D) fewer cultural and sporting events planned

Question 12

Amy buys a new horse for $1500.She receives consumer surplus of $100 on her purchase.What is her willingness to pay

Accepted Answer

A) $100 
B) $1400 
C) $1500 
D) $1600 
A) $100 
B) $1400 
C) $1500 
D) $1600

Question 13

What name is given to the study of how the allocation of resources affects economic well-being

Accepted Answer

A) consumer economics 
B) managerial economics 
C) welfare economics 
D) supply-side economics 
A) consumer economics 
B) managerial economics 
C) welfare economics 
D) supply-side economics

Question 14

Table 7-3
  
-Refer to Table 7-3.If the price is $1000,what is Jackson's producer surplus

Accepted Answer

A) $250 
B) $400 
C) $750 
D) $1000 
A) $250 
B) $400 
C) $750 
D) $1000

Question 15

Consumer surplus measures the benefit to buyers of participating in a market.

Accepted Answer

A) True 
 B)False

Question 16

What does total surplus in a market equal

Accepted Answer

A) Consumer surplus + Producer surplus 
B) Value to buyers - Amount paid by buyers 
C) Amount received by sellers - Costs of sellers 
D) Producer surplus - Consumer surplus 
A) Consumer surplus + Producer surplus 
B) Value to buyers - Amount paid by buyers 
C) Amount received by sellers - Costs of sellers 
D) Producer surplus - Consumer surplus

Question 17

Joel has a 1966 Mustang,which he sells to Susie,an avid car collector.Susie is pleased since she paid $8000 for the car but would have been willing to pay $11,000 for the car.Susie's consumer surplus is $2000.

Accepted Answer

A) True 
 B)False

Question 18

What is the sum of out-of-pocket expenses plus the value of the seller's own resources used in production

Accepted Answer

A) the seller's total revenue 
B) the seller's consumer surplus 
C) producer surplus 
D) the cost of production 
A) the seller's total revenue 
B) the seller's consumer surplus 
C) producer surplus 
D) the cost of production

Question 19

Tammy loves doughnuts.The table shown reflects the value Tammy places on each doughnut she eats:   
a.Use this information to construct Tammy's demand curve for doughnuts.
b.If the price of doughnuts is $0.20, how many doughnuts will Tammy buy
c.Show Tammy's consumer surplus on your graph.How much consumer surplus would she have at a price of $0.20
d.If the price of doughnuts rose to $0.40, how many doughnuts would she purchase now? What would happen to Tammy's consumer surplus? Show this change on your graph.

Accepted Answer

a. @#IMG-DLM& 
b.At a price of $0.20,Tammy would b

Question 20

Market demand is given as QD = 60 - 3P.Market supply is given as QS = 3P.In a perfectly competitive equilibrium,what will be the value of consumer surplus

Accepted Answer

A) $10 
B) $50 
C) $75 
D) $150 
A) $10 
B) $50 
C) $75 
D) $150

For any given quantity,the price on a demand curve represents the marginal buyer's willingness to pay.

Free markets allocate (1) the supply of goods to the buyers who value them most highly and (2) the demand for goods to the sellers who can produce them at the least cost.

Figure 7-3 -Refer to Figure 7-3.Which area represents the increase in producer surplus when the price rises from P₁ to P₂ due to new producers entering the market

Suri is willing to pay $85 for a pair of shoes for her graduation banquet.She finds a pair at her favourite outlet shoe store for $62.What is Suri's consumer surplus

Nathan buys a new sound system for his dorm room for $500.He receives consumer surplus of $400 from the purchase.At what amount does Nathan value his sound system

Market demand is given as Q_D= 150 - 0.5P.Market supply is given as Q_S= 2P.In a perfectly competitive equilibrium,what will be the value of producer surplus

Denise values a stainless steel dishwasher for her new house at $700.The actual price of the dishwasher is $850.What will Denise do

Suppose Connor is willing to pay $400 for a new suit for his graduation,but is able to buy the suit for $350.What is his consumer surplus

According to many economists,what do government restrictions of ticket scalping NOT do

What do many economists believe that restrictions against ticket scalping will NOT cause

Amy buys a new horse for $1500.She receives consumer surplus of $100 on her purchase.What is her willingness to pay

What name is given to the study of how the allocation of resources affects economic well-being

Table 7-3 -Refer to Table 7-3.If the price is $1000,what is Jackson's producer surplus

Consumer surplus measures the benefit to buyers of participating in a market.

What does total surplus in a market equal

Joel has a 1966 Mustang,which he sells to Susie,an avid car collector.Susie is pleased since she paid $8000 for the car but would have been willing to pay $11,000 for the car.Susie's consumer surplus is $2000.

What is the sum of out-of-pocket expenses plus the value of the seller's own resources used in production

Market demand is given as Q_D= 60 - 3P.Market supply is given as Q_S= 3P.In a perfectly competitive equilibrium,what will be the value of consumer surplus

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 Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters

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

For any given quantity,the price on a demand curve represents the marginal buyer's willingness to pay.

Free markets allocate (1) the supply of goods to the buyers who value them most highly and (2) the demand for goods to the sellers who can produce them at the least cost.

Figure 7-3 -Refer to Figure 7-3.Which area represents the increase in producer surplus when the price rises from P₁ to P₂ due to new producers entering the market

Suri is willing to pay $85 for a pair of shoes for her graduation banquet.She finds a pair at her favourite outlet shoe store for $62.What is Suri's consumer surplus

Nathan buys a new sound system for his dorm room for $500.He receives consumer surplus of $400 from the purchase.At what amount does Nathan value his sound system

Market demand is given as QD = 150 - 0.5P.Market supply is given as QS = 2P.In a perfectly competitive equilibrium,what will be the value of producer surplus

Denise values a stainless steel dishwasher for her new house at $700.The actual price of the dishwasher is $850.What will Denise do

Suppose Connor is willing to pay $400 for a new suit for his graduation,but is able to buy the suit for $350.What is his consumer surplus

According to many economists,what do government restrictions of ticket scalping NOT do

What do many economists believe that restrictions against ticket scalping will NOT cause

Amy buys a new horse for $1500.She receives consumer surplus of $100 on her purchase.What is her willingness to pay

What name is given to the study of how the allocation of resources affects economic well-being

Table 7-3 -Refer to Table 7-3.If the price is $1000,what is Jackson's producer surplus

Consumer surplus measures the benefit to buyers of participating in a market.

What does total surplus in a market equal

Joel has a 1966 Mustang,which he sells to Susie,an avid car collector.Susie is pleased since she paid $8000 for the car but would have been willing to pay $11,000 for the car.Susie's consumer surplus is $2000.

What is the sum of out-of-pocket expenses plus the value of the seller's own resources used in production

Market demand is given as QD = 60 - 3P.Market supply is given as QS = 3P.In a perfectly competitive equilibrium,what will be the value of consumer surplus

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 Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters

Market demand is given as Q_D= 150 - 0.5P.Market supply is given as Q_S= 2P.In a perfectly competitive equilibrium,what will be the value of producer surplus

Market demand is given as Q_D= 60 - 3P.Market supply is given as Q_S= 3P.In a perfectly competitive equilibrium,what will be the value of consumer surplus