Question 1

Figure 7-6
​
  
-Refer to Figure 7-6.At the equilibrium price,what would total surplus be

Accepted Answer

A) $480 
B) $640 
C) $1120 
D) $1280 
A) $480 
B) $640 
C) $1120 
D) $1280

Question 2

Shannon buys a new audio system for her car for $335.She receives consumer surplus of $25 on her purchase.What is her willingness to pay

Accepted Answer

A) $25 
B) $300 
C) $335 
D) $360 
A) $25 
B) $300 
C) $335 
D) $360

Question 3

Which of the following does a demand curve NOT reflect

Accepted Answer

A) the willingness to pay of all buyers in the market 
B) the value each buyer in the market places on the good 
C) the highest price buyers are willing to pay for each quantity 
D) the ability of buyers to obtain the quantity they desire 
A) the willingness to pay of all buyers in the market 
B) the value each buyer in the market places on the good 
C) the highest price buyers are willing to pay for each quantity 
D) the ability of buyers to obtain the quantity they desire

Question 4

Suppose Lauren,Leslie,and Lyndsay all purchase bulletin boards for their rooms for $20 each.Lauren's willingness to pay was $35,Leslie's willingness to pay was $25,and Lyndsay's willingness to pay was $30.What is the total consumer surplus for these three

Accepted Answer

A) $10 
B) $20 
C) $30 
D) $40 
A) $10 
B) $20 
C) $30 
D) $40

Question 5

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

Accepted Answer

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

Question 6

What will result if production is moved from a high-cost producer to a low-cost producer

Accepted Answer

A) lower total surplus 
B) higher total surplus 
C) lower producer surplus 
D) higher producer surplus but lower consumer surplus 
A) lower total surplus 
B) higher total surplus 
C) lower producer surplus 
D) higher producer surplus but lower consumer surplus

Question 7

Table 7-2
  
-Refer to Table 7-2.If the market price is $6.90,who will purchase the good

Accepted Answer

A) David, Laura, and Ty 
B) Ty, Mallory, and Audrey 
C) Laura and Ty 
D) David and Laura 
A) David, Laura, and Ty 
B) Ty, Mallory, and Audrey 
C) Laura and Ty 
D) David and Laura

Question 8

What does producer surplus equal

Accepted Answer

A) value to buyers minus amount paid by buyers 
B) amount received by sellers minus costs of sellers 
C) amount received by sellers minus amount paid by buyers 
D) value to buyers minus amount received by sellers 
A) value to buyers minus amount paid by buyers 
B) amount received by sellers minus costs of sellers 
C) amount received by sellers minus amount paid by buyers 
D) value to buyers minus amount received by sellers

Question 9

How can we define consumer surplus in a market

Accepted Answer

A) It is the area below the demand curve and above the price. 
B) It is the distance from the demand curve to the horizontal axis. 
C) It is the distance from the demand curve to the vertical axis. 
D) It is the area below the demand curve and above the horizontal axis. 
A) It is the area below the demand curve and above the price. 
B) It is the distance from the demand curve to the horizontal axis. 
C) It is the distance from the demand curve to the vertical axis. 
D) It is the area below the demand curve and above the horizontal axis.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Market demand is given as QD = 280 - 4P.Market supply is given as QS = - 40 + 2P.In a perfectly competitive equilibrium,what will be the value of producer surplus

Accepted Answer

A) $800 
B) $1200 
C) $2400 
D) $3600 
A) $800 
B) $1200 
C) $2400 
D) $3600

Question 12

What does the equilibrium of supply and demand in a market do

Accepted Answer

A) It maximizes the prices at which producers are willing to sell. 
B) It minimizes the prices that consumers are willing to pay. 
C) It produces both an efficient and equitable market outcome. 
D) It maximizes the total benefits received by buyers and sellers. 
A) It maximizes the prices at which producers are willing to sell. 
B) It minimizes the prices that consumers are willing to pay. 
C) It produces both an efficient and equitable market outcome. 
D) It maximizes the total benefits received by buyers and sellers.

Question 13

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

Accepted Answer

A) $18 
B) $24 
C) $36 
D) $48 
A) $18 
B) $24 
C) $36 
D) $48

Question 14

Figure 7-5
  
-Refer to Figure 7-5.What area represents producer surplus when the price is P₁

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 15

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 happen to producer surplus

Accepted Answer

A) It would necessarily increase even if the higher price resulted in a surplus of widgets. 
B) It would necessarily decrease because the higher price would create a surplus of widgets. 
C) It might increase or decrease. 
D) It would be unaffected. 
A) It would necessarily increase even if the higher price resulted in a surplus of widgets. 
B) It would necessarily decrease because the higher price would create a surplus of widgets. 
C) It might increase or decrease. 
D) It would be unaffected.

Question 16

The willingness to pay is the maximum amount that a buyer will pay for a good and measures how much the buyer values the good.

Accepted Answer

A) True 
 B)False

Question 17

Figure 7-4
  
-Refer to Figure 7-4.When the price falls from P₂ to P₁,what happens to producer surplus

Accepted Answer

A) It decreases by an amount equal to A. 
B) It decreases by an amount equal to A + C. 
C) It decreases by an amount equal to A + B. 
D) It increases by an amount equal to A + B. 
A) It decreases by an amount equal to A. 
B) It decreases by an amount equal to A + C. 
C) It decreases by an amount equal to A + B. 
D) It increases by an amount equal to A + B.

Question 18

Figure 7-4
  
-Refer to Figure 7-4.At the price of P₁,what is producer surplus

Accepted Answer

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

Question 19

Consider the following equation: P = 100 - 2Q.Answer the following questions.
a.What is the consumer surplus when price is equal to $60
b.What is the change of the consumer surplus when price changes to $40

Accepted Answer

a.CS($60) = 1/2*40*20 = 400
b.

Question 20

Table 7-4
  
-Refer to Table 7-4.What is the equilibrium or market-clearing price

Accepted Answer

A) $3 
B) $6 
C) $9 
D) $12 
A) $3 
B) $6 
C) $9 
D) $12

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

Figure 7-6 ​ -Refer to Figure 7-6.At the equilibrium price,what would total surplus be

Shannon buys a new audio system for her car for $335.She receives consumer surplus of $25 on her purchase.What is her willingness to pay

Which of the following does a demand curve NOT reflect

Suppose Lauren,Leslie,and Lyndsay all purchase bulletin boards for their rooms for $20 each.Lauren's willingness to pay was $35,Leslie's willingness to pay was $25,and Lyndsay's willingness to pay was $30.What is the total consumer surplus for these three

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

What will result if production is moved from a high-cost producer to a low-cost producer

Table 7-2 -Refer to Table 7-2.If the market price is $6.90,who will purchase the good

What does producer surplus equal

How can we define consumer surplus in a market

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

Market demand is given as QD = 280 - 4P.Market supply is given as QS = - 40 + 2P.In a perfectly competitive equilibrium,what will be the value of producer surplus

What does the equilibrium of supply and demand in a market do

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

Figure 7-5 -Refer to Figure 7-5.What area represents producer surplus when the price is P₁

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 happen to producer surplus

The willingness to pay is the maximum amount that a buyer will pay for a good and measures how much the buyer values the good.

Figure 7-4 -Refer to Figure 7-4.When the price falls from P₂ to P₁,what happens to producer surplus

Figure 7-4 -Refer to Figure 7-4.At the price of P₁,what is producer surplus

Consider the following equation: P = 100 - 2Q.Answer the following questions. a.What is the consumer surplus when price is equal to $60 b.What is the change of the consumer surplus when price changes to $40

Table 7-4 -Refer to Table 7-4.What is the equilibrium or market-clearing price

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

Figure 7-6 -Refer to Figure 7-6.At the equilibrium price,what would total surplus be

Market demand is given as Q_D= 280 - 4P.Market supply is given as Q_S= - 40 + 2P.In a perfectly competitive equilibrium,what will be the value of producer surplus