Question 1

Figure 7-21  
-Refer to Figure 7-21. Sellers whose costs are 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.

Question 2

Figure 7-10  
-Refer to Figure 7-10. If the equilibrium price is $200, what is the producer surplus?

Accepted Answer

A) $625 
B) $3,750 
C) $10,000 
D) $20,000 
A) $625 
B) $3,750 
C) $10,000 
D) $20,000

Question 3

Figure 7-18  
-Refer to Figure 7-18. At the equilibrium price, total surplus is

Accepted Answer

A) $480. 
B) $640. 
C) $1,120. 
D) $1,280. 
A) $480. 
B) $640. 
C) $1,120. 
D) $1,280.

Question 4

Ticket scalping can increase total surplus in the market for tickets to sporting events.

Accepted Answer

A) True 
 B)False

Question 5

For any given quantity, the price on a demand curve represents the marginal buyer's willingness to pay.

Accepted Answer

A) True 
 B)False

Question 6

Consumer surplus is a good measure of economic welfare if policymakers want to

Accepted Answer

A) maximize total benefit. 
B) minimize deadweight loss. 
C) respect the preferences of sellers. 
D) respect the preferences of buyers. 
A) maximize total benefit. 
B) minimize deadweight loss. 
C) respect the preferences of sellers. 
D) respect the preferences of buyers.

Question 7

Coffee and tea are substitutes. Bad weather that sharply reduces the coffee bean harvest would

Accepted Answer

A) increase consumer surplus in the market for coffee and decrease producer surplus in the market for tea. 
B) increase consumer surplus in the market for coffee and increase producer surplus in the market for tea. 
C) decrease consumer surplus in the market for coffee and increase producer surplus in the market for tea. 
D) decrease consumer surplus in the market for coffee and decrease producer surplus in the market for tea. 
A) increase consumer surplus in the market for coffee and decrease producer surplus in the market for tea. 
B) increase consumer surplus in the market for coffee and increase producer surplus in the market for tea. 
C) decrease consumer surplus in the market for coffee and increase producer surplus in the market for tea. 
D) decrease consumer surplus in the market for coffee and decrease producer surplus in the market for tea.

Question 8

In order to calculate consumer surplus in a market, we need to know willingness to pay and price.

Accepted Answer

A) True 
 B)False

Question 9

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 price of Vanilla Coke is $6.90, who will purchase the good?

Accepted Answer

A) all five individuals 
B) Megan, Mallory and Audrey 
C) David, Laura and Megan 
D) David and Laura 
A) all five individuals 
B) Megan, Mallory and Audrey 
C) David, Laura and Megan 
D) David and Laura

Question 10

Total surplus is represented by the area

Accepted Answer

A) under the demand curve and above the price. 
B) above the supply curve and up to the price. 
C) under the supply curve and up to the price. 
D) between the demand and supply curves up to the point of equilibrium. 
A) under the demand curve and above the price. 
B) above the supply curve and up to the price. 
C) under the supply curve and up to the price. 
D) between the demand and supply curves up to the point of equilibrium.

Question 11

If Darby values a soccer ball at $50, and she pays $40 for it, her consumer surplus is $90.

Accepted Answer

A) True 
 B)False

Question 12

Total surplus is equal to

Accepted Answer

A) value to buyers - profit to sellers. 
B) value to buyers - cost to sellers. 
C) consumer surplus x producer surplus. 
D) (consumer surplus + producer surplus) x equilibrium quantity. 
A) value to buyers - profit to sellers. 
B) value to buyers - cost to sellers. 
C) consumer surplus x producer surplus. 
D) (consumer surplus + producer surplus) x equilibrium quantity.

Question 13

Figure 7-10  
-Refer to Figure 7-10. If the equilibrium price rises from $50 to $200, what is the producer surplus to new 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 14

In a market, the marginal buyer is the buyer

Accepted Answer

A) whose willingness to pay is higher than that of all other buyers and potential buyers. 
B) whose willingness to pay is lower than that of all other buyers and potential buyers. 
C) who is willing to buy exactly one unit of the good. 
D) who would be the first to leave the market if the price were any higher. 
A) whose willingness to pay is higher than that of all other buyers and potential buyers. 
B) whose willingness to pay is lower than that of all other buyers and potential buyers. 
C) who is willing to buy exactly one unit of the good. 
D) who would be the first to leave the market if the price were any higher.

Question 15

If a market is in equilibrium, then it is impossible for a social planner to raise economic welfare by increasing or decreasing the quantity of the good.

Accepted Answer

A) True 
 B)False

Question 16

Table 7-8
The only four producers in a market have the following costs:
 $$\begin{array} { | c | c | } 
\hline \text { Sallar } & \text { Cast } \
\hline \text { Evar } & \$ 50 \
\hline \text { Selana } & \$ 100 \
\hline \text { Angie } & \$ 150 \
\hline \text { Kris } & \$ 200 \
\hline
\end{array}$$
-Refer to Table 7-8. If Evan, Selena, and Angie sell the good, and the resulting producer surplus is $300, then the price must have been

Accepted Answer

A) $200. 
B) $300. 
C) $450. 
D) $600. 
A) $200. 
B) $300. 
C) $450. 
D) $600.

Question 17

At the equilibrium price of a good, the good will be purchased by those buyers who

Accepted Answer

A) value the good more than price. 
B) value the good less than price. 
C) have the money to buy the good. 
D) consider the good a necessity. 
A) value the good more than price. 
B) value the good less than price. 
C) have the money to buy the good. 
D) consider the good a necessity.

Question 18

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

Accepted Answer

A) ACG. 
B) AFG. 
C) KBG. 
D) CFG. 
A) ACG. 
B) AFG. 
C) KBG. 
D) CFG.

Question 19

Figure 7-17  
-Refer to Figure 7-17. When the price is P1, area C represents

Accepted Answer

A) total benefit. 
B) producer surplus. 
C) consumer surplus. 
D) None of the above is correct. 
A) total benefit. 
B) producer surplus. 
C) consumer surplus. 
D) None of the above is correct.

Question 20

Wendy is willing to pay $50 for a concert ticket and Bruce would like to receive $25. If the market price is $40 for this transaction, then the total surplus would be $15.

Accepted Answer

A) True 
 B)False

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

Figure 7-21 -Refer to Figure 7-21. Sellers whose costs are less than the equilibrium price are represented by which line segment?

Figure 7-10 -Refer to Figure 7-10. If the equilibrium price is $200, what is the producer surplus?

Figure 7-18 -Refer to Figure 7-18. At the equilibrium price, total surplus is

Ticket scalping can increase total surplus in the market for tickets to sporting events.

For any given quantity, the price on a demand curve represents the marginal buyer's willingness to pay.

Consumer surplus is a good measure of economic welfare if policymakers want to

Coffee and tea are substitutes. Bad weather that sharply reduces the coffee bean harvest would

In order to calculate consumer surplus in a market, we need to know willingness to pay and price.

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 price of Vanilla Coke is $6.90, who will purchase the good?

Total surplus is represented by the area

If Darby values a soccer ball at $50, and she pays $40 for it, her consumer surplus is $90.

Total surplus is equal to

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

In a market, the marginal buyer is the buyer

If a market is in equilibrium, then it is impossible for a social planner to raise economic welfare by increasing or decreasing the quantity of the good.

Table 7-8 The only four producers in a market have the following costs: Sallar Cast Evar \ 50 Selana \ 100 Angie \ 150 Kris \ 200 -Refer to Table 7-8. If Evan, Selena, and Angie sell the good, and the resulting producer surplus is $300, then the price must have been

At the equilibrium price of a good, the good will be purchased by those buyers who

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

Figure 7-17 -Refer to Figure 7-17. When the price is P1, area C represents

Wendy is willing to pay $50 for a concert ticket and Bruce would like to receive $25. If the market price is $40 for this transaction, then the total surplus would be $15.

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

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