Question 1

When the demand for a good increases and the supply of the good remains unchanged, consumer surplus

Accepted Answer

A) decreases. 
B) is unchanged. 
C) increases. 
D) may increase, decrease, or remain unchanged. 
A) decreases. 
B) is unchanged. 
C) increases. 
D) may increase, decrease, or remain unchanged.

Question 2

Figure 7-13  
-Refer to Figure 7-13. Suppose the price of the good is $450. Then, on the first unit of the good that is sold, producer surplus is

Accepted Answer

A) $250, and on the second unit of the good that is sold, producer surplus is $100. 
B) $250, and on the second unit of the good that is sold, producer surplus is $150. 
C) $350, and on the second unit of the good that is sold, producer surplus is $100. 
D) $350, and on the second unit of the good that is sold, producer surplus is $150. 
A) $250, and on the second unit of the good that is sold, producer surplus is $100. 
B) $250, and on the second unit of the good that is sold, producer surplus is $150. 
C) $350, and on the second unit of the good that is sold, producer surplus is $100. 
D) $350, and on the second unit of the good that is sold, producer surplus is $150.

Question 3

Table 7-2
This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. $$\begin{array} { | l | l | } 
\hline \text { Buyer } & \text { Willinenes Ta Raz } \
\hline \text { David } & \$ 8.50 \
\hline \text { Laura } & \$ 7.00 \
\hline \text { Mepan } & \$ 5.50 \
\hline \text { Mallary } & \$ 4.00 \
\hline \text { Audrey } & \$ 3.50 \
\hline
\end{array}$$
-Refer to Table 7-2. If the market price is $3.80,

Accepted Answer

A) David's consumer surplus is $4.70 and total consumer surplus for the five individuals is $9.50. 
B) Megan's consumer surplus is $1.70 and total consumer surplus for the five individuals is $9.80. 
C) David, Laura, and Megan will be the only buyers of Vanilla Coke. 
D) the demand curve for Vanilla Coke, taking the five individuals into account, is horizontal. 
A) David's consumer surplus is $4.70 and total consumer surplus for the five individuals is $9.50. 
B) Megan's consumer surplus is $1.70 and total consumer surplus for the five individuals is $9.80. 
C) David, Laura, and Megan will be the only buyers of Vanilla Coke. 
D) the demand curve for Vanilla Coke, taking the five individuals into account, is horizontal.

Question 4

Table 7-6
 $$\begin{array} { | l | c } 
\hline \text { Buygr } & \text { Willingrins to Pay } \
\hline \text { Michad } & \$ 500 \
\hline \text { Farvin } & \$ 400 \
\hline \text { Larry } & \$ 350 \
\hline \text { Charles } & \$ 300 \
\hline
\end{array}$$
-Refer to Table 7-6. You have an extra ticket to the Midwest Regional Sweet 16 game in the men's NCAA basketball tournament. The table shows the willingness to pay of the four potential buyers in the market for a ticket to the game. You hold an auction to sell the ticket. Who makes the winning bid, and what does he offer to pay for the ticket?

Accepted Answer

A) Michael; $501 
B) Michael; more than $400 but less than or equal to $500 
C) Earvin; $400 
D) Earvin; more than $350 but less than or equal to $400 
A) Michael; $501 
B) Michael; more than $400 but less than or equal to $500 
C) Earvin; $400 
D) Earvin; more than $350 but less than or equal to $400

Question 5

Suppose the demand for peaches decreases. What will happen to producer surplus in the market for peaches?

Accepted Answer

A) It increases. 
B) It decreases. 
C) It remains unchanged. 
D) It may increase, decrease, or remain unchanged. 
A) It increases. 
B) It decreases. 
C) It remains unchanged. 
D) It may increase, decrease, or remain unchanged.

Question 6

Table 7-3
The only four consumers in a market have the following willingness to pay for a good:
 $$\begin{array} { | c | c | } 
\hline \text { Buyer } & \text { Willingritis to Pay } \
\hline \text { Carlos } & \$ 15 \
\hline \text { Quilena } & \$ 25 \
\hline \text { Wilbur } & \$ 35 \
\hline \text { Ming-la } & \$ 45 \
\hline
\end{array}$$
-Refer to Table 7-3. If there is only one unit of the good and if the buyers bid against each other for the right to purchase it, then the consumer surplus will be

Accepted Answer

A) $0 or slightly more. 
B) $10 or slightly less. 
C) $30 or slightly more. 
D) $45 or slightly less. 
A) $0 or slightly more. 
B) $10 or slightly less. 
C) $30 or slightly more. 
D) $45 or slightly less.

Question 7

In a competitive market, sales go to those producers who are willing to supply the product at the lowest price.

Accepted Answer

A) True 
 B)False

Question 8

Figure 7-10  
-Refer to Figure 7-10. If the equilibrium price rises from $50 to $200, what is the additional producer surplus to initial producers?

Accepted Answer

A) $625 
B) $3,750 
C) $5,625 
D) $10,000 
A) $625 
B) $3,750 
C) $5,625 
D) $10,000

Question 9

Table 7-1
 $$\begin{array} { | l | l | } 
\hline \text { Buger } & \text { Willingnits Ta Raz } \
\hline \text { Lari } & \$ 50.00 \
\hline \text { Audrey } & \$ 30.00 \
\hline \text { Zach } & \$ 20.00 \
\hline \text { Calvin } & \$ 10.00 \
\hline
\end{array}$$
-Refer to Table 7-1. If the price of the product is $51, then who would be willing to purchase the product?

Accepted Answer

A) Lori 
B) Lori and Audrey 
C) Lori, Audrey, and Zach 
D) no one 
A) Lori 
B) Lori and Audrey 
C) Lori, Audrey, and Zach 
D) no one

Question 10

Producer surplus is the area

Accepted Answer

A) under the supply curve. 
B) between the supply and demand curves. 
C) below the price and above the supply curve. 
D) under the demand curve and above the price. 
A) under the supply curve. 
B) between the supply and demand curves. 
C) below the price and above the supply curve. 
D) under the demand curve and above the price.

Question 11

The marginal seller is the seller

Accepted Answer

A) for whom the marginal cost of producing one more unit of output is the lowest among all sellers, and the marginal buyer is the buyer for whom the marginal benefit of one more unit of the good is the highest among all buyers. 
B) who supplies the smallest quantity of the good among all sellers, and the marginal buyer is the buyer who demands the smallest quantity of the good among all buyers. 
C) who would leave the market first if the price were any lower, and the marginal buyer is the buyer who would leave the market first if the price were any higher. 
D) who has the largest producer surplus, and the marginal buyer is the buyer who has the largest consumer surplus. 
A) for whom the marginal cost of producing one more unit of output is the lowest among all sellers, and the marginal buyer is the buyer for whom the marginal benefit of one more unit of the good is the highest among all buyers. 
B) who supplies the smallest quantity of the good among all sellers, and the marginal buyer is the buyer who demands the smallest quantity of the good among all buyers. 
C) who would leave the market first if the price were any lower, and the marginal buyer is the buyer who would leave the market first if the price were any higher. 
D) who has the largest producer surplus, and the marginal buyer is the buyer who has the largest consumer surplus.

Question 12

A consumer's willingness to pay directly measures

Accepted Answer

A) the extent to which advertising and other external forces have influenced the consumer's preferences. 
B) the cost of a good to the buyer. 
C) how much a buyer values a good. 
D) consumer surplus. 
A) the extent to which advertising and other external forces have influenced the consumer's preferences. 
B) the cost of a good to the buyer. 
C) how much a buyer values a good. 
D) consumer surplus.

Question 13

Raisin bran and milk are complementary goods. A decrease in the price of raisins will

Accepted Answer

A) increase consumer surplus in the market for raisin bran and decrease producer surplus in the market for milk. 
B) increase consumer surplus in the market for raisin bran and increase producer surplus in the market for milk. 
C) decrease consumer surplus in the market for raisin bran and increase producer surplus in the market for milk. 
D) decrease consumer surplus in the market for raisin bran and decrease producer surplus in the market for milk. 
A) increase consumer surplus in the market for raisin bran and decrease producer surplus in the market for milk. 
B) increase consumer surplus in the market for raisin bran and increase producer surplus in the market for milk. 
C) decrease consumer surplus in the market for raisin bran and increase producer surplus in the market for milk. 
D) decrease consumer surplus in the market for raisin bran and decrease producer surplus in the market for milk.

Question 14

Figure 7-8  
-Refer to Figure 7-8. Which area represents producer surplus when the price is P2?

Accepted Answer

A) BCG 
B) ACH 
C) ABGD 
D) AHGB 
A) BCG 
B) ACH 
C) ABGD 
D) AHGB

Question 15

Economists generally believe that, although there may be advantages to society from ticket-scalping, the costs to society of this activity outweigh the benefits.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) you should buy more tomatoes before the end of the week. 
B) you already have bought too many tomatoes this week. 
C) your consumer surplus on the last tomato you bought is zero. 
D) your consumer surplus on all of the tomatoes you have bought this week is zero. 
A) you should buy more tomatoes before the end of the week. 
B) you already have bought too many tomatoes this week. 
C) your consumer surplus on the last tomato you bought is zero. 
D) your consumer surplus on all of the tomatoes you have bought this week is zero.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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. If the market price of an orange is $0.70, then the market quantity of oranges demanded per day is

Accepted Answer

A)  5. 
B)  6. 
C)  7. 
D)  9. 
A)  5. 
B)  6. 
C)  7. 
D)  9.

Question 19

If the government allowed a free market for transplant organs such as kidneys to exist, the

Accepted Answer

A) shortage of organs would be eliminated, and there would be no surplus of organs. 
B) shortage of organs would be eliminated, but a surplus of organs would develop. 
C) shortage of organs would persist. 
D) overall well-being of society would remain unchanged. 
A) shortage of organs would be eliminated, and there would be no surplus of organs. 
B) shortage of organs would be eliminated, but a surplus of organs would develop. 
C) shortage of organs would persist. 
D) overall well-being of society would remain unchanged.

Question 20

Figure 7-21  
-Refer to Figure 7-21. Buyers who value this good less than the equilibrium price are represented by which line segment?

Accepted Answer

A) AC. 
B) CK. 
C) BC. 
D) CH. 
A) AC. 
B) CK. 
C) BC. 
D) CH.

When the demand for a good increases and the supply of the good remains unchanged, consumer surplus

Figure 7-13 -Refer to Figure 7-13. Suppose the price of the good is $450. Then, on the first unit of the good that is sold, producer surplus is

Table 7-2 This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. Buyer Willinenes Ta Raz David \ 8.50 Laura \ 7.00 Mepan \ 5.50 Mallary \ 4.00 Audrey \ 3.50 -Refer to Table 7-2. If the market price is $3.80,

Suppose the demand for peaches decreases. What will happen to producer surplus in the market for peaches?

In a competitive market, sales go to those producers who are willing to supply the product at the lowest price.

Figure 7-10 -Refer to Figure 7-10. If the equilibrium price rises from $50 to $200, what is the additional producer surplus to initial producers?

Table 7-1 Buger Willingnits Ta Raz Lari \ 50.00 Audrey \ 30.00 Zach \ 20.00 Calvin \ 10.00 -Refer to Table 7-1. If the price of the product is $51, then who would be willing to purchase the product?

Producer surplus is the area

The marginal seller is the seller

A consumer's willingness to pay directly measures

Raisin bran and milk are complementary goods. A decrease in the price of raisins will

Figure 7-8 -Refer to Figure 7-8. Which area represents producer surplus when the price is P2?

Economists generally believe that, although there may be advantages to society from ticket-scalping, the costs to society of this activity outweigh the benefits.

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

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

If the government allowed a free market for transplant organs such as kidneys to exist, the

Figure 7-21 -Refer to Figure 7-21. Buyers who value this good less than the equilibrium price are represented by which line segment?

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

When the demand for a good increases and the supply of the good remains unchanged, consumer surplus

Figure 7-13 -Refer to Figure 7-13. Suppose the price of the good is $450. Then, on the first unit of the good that is sold, producer surplus is

Table 7-2 This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. Buyer Willinenes Ta Raz David \ 8.50 Laura \ 7.00 Mepan \ 5.50 Mallary \ 4.00 Audrey \ 3.50 -Refer to Table 7-2. If the market price is $3.80,

Suppose the demand for peaches decreases. What will happen to producer surplus in the market for peaches?

In a competitive market, sales go to those producers who are willing to supply the product at the lowest price.

Figure 7-10 -Refer to Figure 7-10. If the equilibrium price rises from $50 to $200, what is the additional producer surplus to initial producers?

Table 7-1 Buger Willingnits Ta Raz Lari \ 50.00 Audrey \ 30.00 Zach \ 20.00 Calvin \ 10.00 -Refer to Table 7-1. If the price of the product is $51, then who would be willing to purchase the product?

Producer surplus is the area

The marginal seller is the seller

A consumer's willingness to pay directly measures

Raisin bran and milk are complementary goods. A decrease in the price of raisins will

Figure 7-8 -Refer to Figure 7-8. Which area represents producer surplus when the price is P2?

Economists generally believe that, although there may be advantages to society from ticket-scalping, the costs to society of this activity outweigh the benefits.

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

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

If the government allowed a free market for transplant organs such as kidneys to exist, the

Figure 7-21 -Refer to Figure 7-21. Buyers who value this good less than the equilibrium price are represented by which line segment?

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