Question 1

Figure 7-13  
-Refer to Figure 7-13. If the price of the good is $300, then producer surplus amounts to

Accepted Answer

A) $100. 
B) $200. 
C) $300. 
D) $400. 
A) $100. 
B) $200. 
C) $300. 
D) $400.

Question 2

Figure 7-19  
-Refer to Figure 7-19. At equilibrium, total surplus is represented by the area

Accepted Answer

A) A+B+C. 
B) A+B+D+F. 
C) A+B+C+D+H+F. 
D) A+B+C+D+H+F+G+I. 
A) A+B+C. 
B) A+B+D+F. 
C) A+B+C+D+H+F. 
D) A+B+C+D+H+F+G+I.

Question 3

Welfare economics is the study of the welfare system.

Accepted Answer

A) True 
 B)False

Question 4

Producer surplus directly measures

Accepted Answer

A) the well-being of sellers. 
B) production costs. 
C) excess demand. 
D) unsold inventories. 
A) the well-being of sellers. 
B) production costs. 
C) excess demand. 
D) unsold inventories.

Question 5

Table 7-10
 $$\begin{array} { | l | r | } 
\hline \text { Seller } & \text { Cost } \
\hline \text { Lepran } & \$ 700 \
\hline \text { Kabe } & \$ 600 \
\hline \text { Kevin } & \$ 450 \
\hline \text { Steve } & \$ 400 \
\hline
\end{array}$$
-Refer to Table 7-10. You and your best friend want to hire a professional photographer to take pictures of your two families. The table shows the costs of the four potential sellers in the local photography market. You and your friend agree to offer $500 for each session. Who accepts the offer, and what is the total producer surplus in the market?

Accepted Answer

A) LeBron and Kobe; $500 
B) Kevin and Steve; $500 
C) LeBron and Kobe; $300 
D) Kevin and Steve; $150 
A) LeBron and Kobe; $500 
B) Kevin and Steve; $500 
C) LeBron and Kobe; $300 
D) Kevin and Steve; $150

Question 6

Table 7-11
 $$\begin{array} { | c | c | c } 
\hline \text { Price } & \begin{array} { c } 
\text { Quantity } \
\text { Demanded }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Supplied }
\end{array} \
\hline \$ 12.00 & 0 & 36 \
\hline \$ 10.00 & 3 & 30 \
\hline \$ 8.00 & 6 & 24 \
\hline \$ 6.00 & 9 & 18 \
\hline \$ 4.00 & 12 & 12 \
\hline \$ 2.00 & 15 & 6 \
\hline \$ 0.00 & 18 & 0 \
\hline
\end{array}$$
-Refer to Table 7-11. Both the demand curve and the supply curve are straight lines. If the price is $4 but only 6 units are bought and sold, total surplus will be

Accepted Answer

A) $42. 
B) $48. 
C) $54. 
D) $60. 
A) $42. 
B) $48. 
C) $54. 
D) $60.

Question 7

A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it

Accepted Answer

A) maximizes both the total revenue for firms and the quantity supplied of the product. 
B) maximizes the combined welfare of buyers and sellers. 
C) minimizes costs and maximizes output. 
D) minimizes the level of welfare payments. 
A) maximizes both the total revenue for firms and the quantity supplied of the product. 
B) maximizes the combined welfare of buyers and sellers. 
C) minimizes costs and maximizes output. 
D) minimizes the level of welfare payments.

Question 8

Table 7-7
The following table represents the costs of five possible sellers. $$\begin{array} { | l | l | } 
\hline \text { Seller } & \text { Cost } \
\hline \text { Abby } & \$ 1,500 \
\hline \text { Babby } & \$ 1,200 \
\hline \text { Carlos } & \$ 1,000 \
\hline \text { Dianne } & \$ 750 \
\hline \text { Evalina } & \$ 500 \
\hline
\end{array}$$
-Refer to Table 7-7. If the market price is $900, the combined total cost of all participating sellers is

Accepted Answer

A) $3,700. 
B) $2,700. 
C) $2,250. 
D) $1,250. 
A) $3,700. 
B) $2,700. 
C) $2,250. 
D) $1,250.

Question 9

Figure 7-12  
-Refer to Figure 7-12. Suppose producer surplus is larger than C but smaller than A+B+C. The price of the good must be

Accepted Answer

A) lower than P1. 
B) P1. 
C) between P1 and P2. 
D) higher than P2. 
A) lower than P1. 
B) P1. 
C) between P1 and P2. 
D) higher than P2.

Question 10

Figure 7-9  
-Refer to Figure 7-9. If the supply curve is S, the demand curve is D, and the equilibrium price is $100, what is the producer surplus?

Accepted Answer

A) $625 
B) $1,250 
C) $2,500 
D) $5,000 
A) $625 
B) $1,250 
C) $2,500 
D) $5,000

Question 11

Total surplus in a market will increase when the government

Accepted Answer

A) imposes a tax on that market. 
B) imposes a binding price floor on that market. 
C) removes a binding price ceiling from that market. 
D) None of the above is correct. 
A) imposes a tax on that market. 
B) imposes a binding price floor on that market. 
C) removes a binding price ceiling from that market. 
D) None of the above is correct.

Question 12

Market power and externalities are examples of market failures.

Accepted Answer

A) True 
 B)False

Question 13

Donald produces nails at a cost of $350 per ton. If he sells the nails for $500 per ton, his producer surplus is

Accepted Answer

A) $150. 
B) $350. 
C) $500. 
D) $850. 
A) $150. 
B) $350. 
C) $500. 
D) $850.

Question 14

Donald produces nails at a cost of $200 per ton. If he sells the nails for $350 per ton, his producer surplus per ton is

Accepted Answer

A) $150. 
B) $200. 
C) $350. 
D) $550. 
A) $150. 
B) $200. 
C) $350. 
D) $550.

Question 15

Figure 7-19  
-Refer to Figure 7-19. At equilibrium, consumer surplus is represented by the area

Accepted Answer

A) A. 
B) A+B+C. 
C) D+H+F. 
D) A+B+C+D+H+F. 
A) A. 
B) A+B+C. 
C) D+H+F. 
D) A+B+C+D+H+F.

Question 16

Figure 7-9  
-Refer to Figure 7-9. If the supply curve is S', the demand curve is D, and the equilibrium price is $150, what is the producer surplus?

Accepted Answer

A) $625 
B) $1,250 
C) $2,500 
D) $5,000 
A) $625 
B) $1,250 
C) $2,500 
D) $5,000

Question 17

Table 7-5
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. $$\begin{array} { | l | c | c | c | } 
\hline & \text { First Orangp } & \text { Second Orange } & \text { Third Orange } \
\hline \text { Alliton } & \$ 2.00 & \$ 1.50 & \$ 0.75 \
\hline \text { Bob } & \$ 1.50 & \$ 1.00 & \$ 0.80 \
\hline \text { Chariste } & \$ 0.75 & \$ 0.25 & \$ 0 \
\hline
\end{array}$$
-Refer to Table 7-5. Who experiences the largest loss of consumer surplus when the price of an orange increases from $0.70 to $1.40?

Accepted Answer

A) Allison 
B) Bob 
C) Charisse 
D) All three individuals experience the same loss of consumer surplus. 
A) Allison 
B) Bob 
C) Charisse 
D) All three individuals experience the same loss of consumer surplus.

Question 18

The welfare of sellers is measured by

Accepted Answer

A) consumer surplus. 
B) producer surplus. 
C) total surplus. 
D) price. 
A) consumer surplus. 
B) producer surplus. 
C) total surplus. 
D) price.

Question 19

One of the basic principles of economics is that markets are usually a good way to organize economic activity. This principle is explained by the study of

Accepted Answer

A) factor markets. 
B) energy markets. 
C) welfare economics. 
D) labor economics. 
A) factor markets. 
B) energy markets. 
C) welfare economics. 
D) labor economics.

Question 20

When there is a technological advance in the pork industry, consumer surplus in that market will

Accepted Answer

A) increase. 
B) decrease. 
C) not change, since technology affects producers and not consumers. 
D) not change, since consumers' willingness to pay is unaffected by the technological advance. 
A) increase. 
B) decrease. 
C) not change, since technology affects producers and not consumers. 
D) not change, since consumers' willingness to pay is unaffected by the technological advance.

Figure 7-13 -Refer to Figure 7-13. If the price of the good is $300, then producer surplus amounts to

Figure 7-19 -Refer to Figure 7-19. At equilibrium, total surplus is represented by the area

Welfare economics is the study of the welfare system.

Producer surplus directly measures

A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it

Table 7-7 The following table represents the costs of five possible sellers. Seller Cost Abby \ 1,500 Babby \ 1,200 Carlos \ 1,000 Dianne \ 750 Evalina \ 500 -Refer to Table 7-7. If the market price is $900, the combined total cost of all participating sellers is

Figure 7-12 -Refer to Figure 7-12. Suppose producer surplus is larger than C but smaller than A+B+C. The price of the good must be

Figure 7-9 -Refer to Figure 7-9. If the supply curve is S, the demand curve is D, and the equilibrium price is $100, what is the producer surplus?

Total surplus in a market will increase when the government

Market power and externalities are examples of market failures.

Donald produces nails at a cost of $350 per ton. If he sells the nails for $500 per ton, his producer surplus is

Donald produces nails at a cost of $200 per ton. If he sells the nails for $350 per ton, his producer surplus per ton is

Figure 7-19 -Refer to Figure 7-19. At equilibrium, consumer surplus is represented by the area

Figure 7-9 -Refer to Figure 7-9. If the supply curve is S', the demand curve is D, and the equilibrium price is $150, what is the producer surplus?

The welfare of sellers is measured by

One of the basic principles of economics is that markets are usually a good way to organize economic activity. This principle is explained by the study of

When there is a technological advance in the pork industry, consumer surplus in that market will

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

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomic Models

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

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

Figure 7-13 -Refer to Figure 7-13. If the price of the good is $300, then producer surplus amounts to

Figure 7-19 -Refer to Figure 7-19. At equilibrium, total surplus is represented by the area

Welfare economics is the study of the welfare system.

Producer surplus directly measures

A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it

Table 7-7 The following table represents the costs of five possible sellers. Seller Cost Abby \ 1,500 Babby \ 1,200 Carlos \ 1,000 Dianne \ 750 Evalina \ 500 -Refer to Table 7-7. If the market price is $900, the combined total cost of all participating sellers is

Figure 7-12 -Refer to Figure 7-12. Suppose producer surplus is larger than C but smaller than A+B+C. The price of the good must be

Figure 7-9 -Refer to Figure 7-9. If the supply curve is S, the demand curve is D, and the equilibrium price is $100, what is the producer surplus?

Total surplus in a market will increase when the government

Market power and externalities are examples of market failures.

Donald produces nails at a cost of $350 per ton. If he sells the nails for $500 per ton, his producer surplus is

Donald produces nails at a cost of $200 per ton. If he sells the nails for $350 per ton, his producer surplus per ton is

Figure 7-19 -Refer to Figure 7-19. At equilibrium, consumer surplus is represented by the area

Figure 7-9 -Refer to Figure 7-9. If the supply curve is S', the demand curve is D, and the equilibrium price is $150, what is the producer surplus?

The welfare of sellers is measured by

One of the basic principles of economics is that markets are usually a good way to organize economic activity. This principle is explained by the study of

When there is a technological advance in the pork industry, consumer surplus in that market will

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

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomic Models

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters