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

Producing a soccer ball costs Jake $5. He sells it to Darby for $35. Darby values the soccer ball at $50. For this transaction, the total surplus in the market is $40.

Figure 7-14 -Refer to Figure 7-14. If total surplus is $750 and consumer surplus is

Efficiency refers to whether a market outcome is fair, while equality refers to whether the maximum amount of output was produced from a given number of inputs.

Michael values a stainless steel refrigerator for his new house at $3,500, but he succeeds in buying one for $3,000. Michael's consumer surplus is

Total surplus = Value to buyers - Costs to sellers.

Which of the Ten Principles of Economics does welfare economics explain more fully?

Figure 7-20 -Refer to Figure 7-20. At equilibrium, consumer surplus is measured by the area

Which of the following will cause no change in producer surplus?

Bill created a new software program he is willing to sell for $200. He sells his first copy and enjoys a producer surplus of $150. What is the price paid for the software?

If the United States legally allowed for a market in transplant organs, it is estimated that one kidney would sell for at least $100,000.

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. First Orangp Second Orange Third Orange Alliton \ 2.00 \ 1.50 \ 0.75 Bob \ 1.50 \ 1.00 \ 0.80 Chariste \ 0.75 \ 0.25 \ 0 -Refer to Table 7-5. If the market price of an orange is $1.20, then the market quantity of oranges demanded per day is

Chuck would be willing to pay $20 to attend a dog show, but he buys a ticket for $15. Chuck values the dog show at

Figure 7-12 -Refer to Figure 7-12. Area B represents

If the price of oak lumber increases, what happens to consumer surplus in the market for oak cabinets?

Total surplus in a market can be measured as the area below the supply curve plus the area above the demand curve, up to the point of equilibrium.

If the government imposes a binding price floor in a market, then the consumer surplus in that market will decrease.

Consumer surplus

Suppose you sell a kayak for $600, but you were willing to sell it for $450. The buyer was willing to pay $650. The total surplus is $200.

Pat bought a new car for $15,500 but was willing to pay $24,000. The consumer surplus is

A simultaneous decrease in both the demand for MP3 players and the supply of MP3 players would imply that