Question 1

Table 7-4
  
-Refer to Table 7-4.At the equilibrium price,what would total surplus be

Accepted Answer

A) $18 
B) $24 
C) $48 
D) $72 
A) $18 
B) $24 
C) $48 
D) $72

Question 2

Suppose the demand for nachos increases.What will happen to producer surplus in the market for nachos

Accepted Answer

A) It increases. 
B) It decreases. 
C) It is unaffected by this change in market forces. 
D) It decreases briefly then increases. 
A) It increases. 
B) It decreases. 
C) It is unaffected by this change in market forces. 
D) It decreases briefly then increases.

Question 3

Figure 7-8
  
-Refer to the above figure.At the market-clearing equilibrium,which area represents total producer surplus

Accepted Answer

A) C + F + D 
B) A + B + D + D + E + F 
C) C + F + G 
D) E + F 
A) C + F + D 
B) A + B + D + D + E + F 
C) C + F + G 
D) E + F

Question 4

What is the impact of a technological advance in the production of smart phones

Accepted Answer

A) increase consumer surplus in the market for smart phones but decrease producer surplus in the market for software apps 
B) increase consumer surplus in the market for smart phones and increase producer surplus in the market for software apps 
C) decrease consumer surplus in the market for smart phones but increase producer surplus in the market for software apps 
D) decrease consumer surplus in the market for smart phones and decrease producer surplus in the market for software apps 
A) increase consumer surplus in the market for smart phones but decrease producer surplus in the market for software apps 
B) increase consumer surplus in the market for smart phones and increase producer surplus in the market for software apps 
C) decrease consumer surplus in the market for smart phones but increase producer surplus in the market for software apps 
D) decrease consumer surplus in the market for smart phones and decrease producer surplus in the market for software apps

Question 5

Restrictions against ticket scalping actually drive up the cost of many tickets.

Accepted Answer

A) True 
 B)False

Question 6

Zara produces carrot muffins.Her production cost is $2 per dozen.She sells the muffins for $6 per dozen.What is her producer surplus

Accepted Answer

A) $3 per dozen 
B) $4 per dozen 
C) $6 per dozen 
D) $8 per dozen 
A) $3 per dozen 
B) $4 per dozen 
C) $6 per dozen 
D) $8 per dozen

Question 7

Knowing the cost of production,which decision will a seller mostly likely make

Accepted Answer

A) A seller would be eager to sell her product at a price higher than her cost and refuse to sell her product at a price equal to her cost. 
B) A seller would refuse to sell her product at a price lower than her cost and willing to sell her product at a price equal to her cost. 
C) A seller would be eager to sell her produce at a price higher than her cost and refuse to sell her product at a price lower than her cost. 
D) A seller must be willing to sell her product at any price since sellers cannot set the price for their product. 
A) A seller would be eager to sell her product at a price higher than her cost and refuse to sell her product at a price equal to her cost. 
B) A seller would refuse to sell her product at a price lower than her cost and willing to sell her product at a price equal to her cost. 
C) A seller would be eager to sell her produce at a price higher than her cost and refuse to sell her product at a price lower than her cost. 
D) A seller must be willing to sell her product at any price since sellers cannot set the price for their product.

Question 8

Suppose that Emmilyn,Cassie,and Tessa are bidding in an auction for a mint-condition video of the original Star Wars movie.Each has in mind a maximum amount that she will bid.What is this maximum called

Accepted Answer

A) resistance price 
B) willingness to pay 
C) consumer surplus 
D) producer surplus 
A) resistance price 
B) willingness to pay 
C) consumer surplus 
D) producer surplus

Question 9

Table 7-2
  
-Refer to Table 7-2.At different market prices,which statement is NOT correct

Accepted Answer

A) At a price of $9.00, no buyer is willing to purchase the good. 
B) At a price of $7.50, the consumer surplus for Laura is $0.50. 
C) When the price is $3.00, each person would receive consumer surplus. 
D) At a price of $4.00, total consumer surplus in the market will be $8.50. 
A) At a price of $9.00, no buyer is willing to purchase the good. 
B) At a price of $7.50, the consumer surplus for Laura is $0.50. 
C) When the price is $3.00, each person would receive consumer surplus. 
D) At a price of $4.00, total consumer surplus in the market will be $8.50.

Question 10

If the cost of producing sectional sofas decreases,what happens to consumer surplus

Accepted Answer

A) It increases then decreases. 
B) It decreases. 
C) It remains constant. 
D) It increases. 
A) It increases then decreases. 
B) It decreases. 
C) It remains constant. 
D) It increases.

Question 11

Suppose that the equilibrium price in the market for widgets is $8.If a law increased the minimum legal price for widgets to $9,what would be the outcome

Accepted Answer

A) The resulting increase in consumer surplus would be larger than any possible loss of producer surplus. 
B) The resulting increase in consumer surplus would be smaller than any possible loss of producer surplus. 
C) Any possible increase in producer surplus would be larger than the loss of consumer surplus. 
D) Any possible increase in producer surplus would be smaller than the loss of consumer surplus. 
A) The resulting increase in consumer surplus would be larger than any possible loss of producer surplus. 
B) The resulting increase in consumer surplus would be smaller than any possible loss of producer surplus. 
C) Any possible increase in producer surplus would be larger than the loss of consumer surplus. 
D) Any possible increase in producer surplus would be smaller than the loss of consumer surplus.

Question 12

Figure 7-7
  
-Refer to Figure 7-7.Which segment represents buyers who value this good less than price

Accepted Answer

A) AC 
B) BC 
C) CD 
D) CE 
A) AC 
B) BC 
C) CD 
D) CE

Question 13

Calvin buys a new tractor for $125,000.He receives consumer surplus of $13,000 on his purchase.What is Calvin's willingness to pay

Accepted Answer

A) $13,000 
B) $125,000 
C) $125 ,000 
D) $138,000 
A) $13,000 
B) $125,000 
C) $125 ,000 
D) $138,000

Question 14

Which factor can cause inefficiency in a market

Accepted Answer

A) a good not being produced by sellers with the lowest cost 
B) a good being consumed by buyers who value it most highly 
C) scalping 
D) the market being unregulated 
A) a good not being produced by sellers with the lowest cost 
B) a good being consumed by buyers who value it most highly 
C) scalping 
D) the market being unregulated

Question 15

Lauren and Amy sell lemonade on a street corner.Each glass costs them $0.05 to make.At the end of the day,they have sold 50 glasses and received a total producer surplus of $22.50.What are Lauren and Amy selling each glass for

Accepted Answer

A) $0.15 
B) $0.20 
C) $0.30 
D) $0.45 
A) $0.15 
B) $0.20 
C) $0.30 
D) $0.45

Question 16

Connie can clean windows in large office buildings at a cost of $1 per window.The market price for window cleaning is $3 per window.If Connie cleans 100 windows,her producer surplus is $100.

Accepted Answer

A) True 
 B)False

Question 17

Figure 7-4
  
-Refer to Figure 7-4.What does area A represent

Accepted Answer

A) the increase in producer surplus to new producers entering the market as the result of price rising from P₁ to P₂ 
B) the increase in consumer surplus that results from new consumers entering the market as the result of price rising from P₁ to P₂ 
C) an increase in total surplus when sellers are willing and able to increase supply from Q₁ to Q₂ 
D) the increase in producer surplus to those producers already in the market when price rises from P₁ to P₂ 
A) the increase in producer surplus to new producers entering the market as the result of price rising from P₁ to P₂ 
B) the increase in consumer surplus that results from new consumers entering the market as the result of price rising from P₁ to P₂ 
C) an increase in total surplus when sellers are willing and able to increase supply from Q₁ to Q₂ 
D) the increase in producer surplus to those producers already in the market when price rises from P₁ to P₂

Question 18

If Jadelyn sells a bracelet for $30,and her producer surplus from the sale is $21,what must her cost have been

Accepted Answer

A) $9 
B) $21 
C) $30 
D) $51 
A) $9 
B) $21 
C) $30 
D) $51

Question 19

What does market power refer to

Accepted Answer

A) the side effects that may occur in a market 
B) the government regulations imposed on the sellers in a market 
C) the ability to influence price 
D) the forces of supply and demand in determining equilibrium price 
A) the side effects that may occur in a market 
B) the government regulations imposed on the sellers in a market 
C) the ability to influence price 
D) the forces of supply and demand in determining equilibrium price

Question 20

When would a seller be willing to sell a product

Accepted Answer

A) only if the price received is less than the cost of production 
B) only if the price received is at least as great as the cost of production 
C) only if the price received is equal to the cost of production 
D) only if the price received is at least double the cost of production 
A) only if the price received is less than the cost of production 
B) only if the price received is at least as great as the cost of production 
C) only if the price received is equal to the cost of production 
D) only if the price received is at least double the cost of production

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

Table 7-4 -Refer to Table 7-4.At the equilibrium price,what would total surplus be

Suppose the demand for nachos increases.What will happen to producer surplus in the market for nachos

Figure 7-8 -Refer to the above figure.At the market-clearing equilibrium,which area represents total producer surplus

What is the impact of a technological advance in the production of smart phones

Restrictions against ticket scalping actually drive up the cost of many tickets.

Zara produces carrot muffins.Her production cost is $2 per dozen.She sells the muffins for $6 per dozen.What is her producer surplus

Knowing the cost of production,which decision will a seller mostly likely make

Suppose that Emmilyn,Cassie,and Tessa are bidding in an auction for a mint-condition video of the original Star Wars movie.Each has in mind a maximum amount that she will bid.What is this maximum called

Table 7-2 -Refer to Table 7-2.At different market prices,which statement is NOT correct

If the cost of producing sectional sofas decreases,what happens to consumer surplus

Suppose that the equilibrium price in the market for widgets is $8.If a law increased the minimum legal price for widgets to $9,what would be the outcome

Figure 7-7 -Refer to Figure 7-7.Which segment represents buyers who value this good less than price

Calvin buys a new tractor for $125,000.He receives consumer surplus of $13,000 on his purchase.What is Calvin's willingness to pay

Which factor can cause inefficiency in a market

Lauren and Amy sell lemonade on a street corner.Each glass costs them $0.05 to make.At the end of the day,they have sold 50 glasses and received a total producer surplus of $22.50.What are Lauren and Amy selling each glass for

Connie can clean windows in large office buildings at a cost of $1 per window.The market price for window cleaning is $3 per window.If Connie cleans 100 windows,her producer surplus is $100.

Figure 7-4 -Refer to Figure 7-4.What does area A represent

If Jadelyn sells a bracelet for $30,and her producer surplus from the sale is $21,what must her cost have been

What does market power refer to

When would a seller be willing to sell a product

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

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