Question 1

Total surplus in a market equals:

Accepted Answer

A)  value to buyers - amount paid by buyers 
B)  amount received by sellers - costs of sellers 
C)  producer surplus - consumer surplus 
D)  consumer surplus + producer surplus 
A)  value to buyers - amount paid by buyers 
B)  amount received by sellers - costs of sellers 
C)  producer surplus - consumer surplus 
D)  consumer surplus + producer surplus

Question 2

How does producer surplus differ from the market price?

Accepted Answer

Producer surplus is the measure of the b

Question 3

Consumer surplus is closely related to the demand curve for a product.

Accepted Answer

A) True 
 B)False

Question 4

The tools of consumer surplus and producer surplus enables us to determine whether free-market allocation of resources is desirable.

Accepted Answer

A) True 
 B)False

Question 5

Producer surplus measures the:

Accepted Answer

A)  wellbeing of sellers 
B)  wellbeing of society as a whole 
C)  goods and services that the seller cannot find a buyer for 
D)  wellbeing of buyers 
A)  wellbeing of sellers 
B)  wellbeing of society as a whole 
C)  goods and services that the seller cannot find a buyer for 
D)  wellbeing of buyers

Question 6

Graph 7-1
  
-Refer to Graph 7-1. What area represents total surplus in the market when the price is P1?

Accepted Answer

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

Question 7

Suppose the price of music downloads falls. Which statement is not true?

Accepted Answer

A)  buyers who were already downloading music are better off 
B)  some new customers will begin music downloads that had previously thought it was too expensive 
C)  the total consumer surplus in the market decreases 
D)  there will be an increase in the number of songs downloaded 
A)  buyers who were already downloading music are better off 
B)  some new customers will begin music downloads that had previously thought it was too expensive 
C)  the total consumer surplus in the market decreases 
D)  there will be an increase in the number of songs downloaded

Question 8

Any goods not sold in a vegetable market at the end of the day are producer surplus.

Accepted Answer

A) True 
 B)False

Question 9

Market failure refers to firms that go bankrupt because they do not produce the goods and services that consumers want.

Accepted Answer

A) True 
 B)False

Question 10

Amy buys a new computer for her studies for $1200. She receives consumer surplus of $300 from the purchase. How much does Amy value her computer?

Accepted Answer

A)  $300 
B)  $900 
C)  $1200 
D)  $1500 
A)  $300 
B)  $900 
C)  $1200 
D)  $1500

Question 11

In a competitive market, sales go to those producers who are willing to supply the product with the best after-sales service.

Accepted Answer

A) True 
 B)False

Question 12

The marginal seller is the seller who:

Accepted Answer

A)  cannot compete with the other sellers in the market 
B)  would leave the market first if the price were any lower 
C)  can produce at the lowest cost 
D)  has the greatest producer surplus 
A)  cannot compete with the other sellers in the market 
B)  would leave the market first if the price were any lower 
C)  can produce at the lowest cost 
D)  has the greatest producer surplus

Question 13

Lee is willing and able to pay $300 for a particular MP3 player but is able to buy it for $199. Lee's consumer surplus is:

Accepted Answer

A)  $0 
B)  $101 
C)  $199 
D)  $300 
A)  $0 
B)  $101 
C)  $199 
D)  $300

Question 14

Consumer surplus = Price of the good.

Accepted Answer

A) True 
 B)False

Question 15

Michele is willing to pay $15 to see St Trinians for the fourth time. She finds a theatre showing St Trinians for $8.00. Michele's consumer surplus is:

Accepted Answer

A)  $0 
B)  $7 
C)  $8 
D)  $15 
A)  $0 
B)  $7 
C)  $8 
D)  $15

Question 16

Economists tend to see ticket scalping as:

Accepted Answer

A)  a way for a few to profit while producing nothing of value 
B)  an inequitable interference in the orderly process of ticket distribution 
C)  a way of increasing the efficiency of ticket distribution 
D)  an unproductive activity which should be made illegal everywhere 
A)  a way for a few to profit while producing nothing of value 
B)  an inequitable interference in the orderly process of ticket distribution 
C)  a way of increasing the efficiency of ticket distribution 
D)  an unproductive activity which should be made illegal everywhere

Question 17

Producer surplus equals:

Accepted Answer

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

Question 18

Table A
  
-Use the information in Table A to fill in the blanks in Table B

Accepted Answer

The answer of Table A
  
-Use the information in...

Question 19

In all markets consumer surplus measures the economic wellbeing in that market.

Accepted Answer

A) True 
 B)False

Question 20

According to many economists, government restrictions on ticket scalping do all of the following EXCEPT:

Accepted Answer

A)  inconvenience the public 
B)  reduce the audience for cultural and sports events 
C)  waste the police's time 
D)  keep the cost of tickets to consumers low 
A)  inconvenience the public 
B)  reduce the audience for cultural and sports events 
C)  waste the police's time 
D)  keep the cost of tickets to consumers low

Exam 7: Consumers, Producers and the Efficiency of Markets

Total surplus in a market equals:

How does producer surplus differ from the market price?

Consumer surplus is closely related to the demand curve for a product.

The tools of consumer surplus and producer surplus enables us to determine whether free-market allocation of resources is desirable.

Producer surplus measures the:

Graph 7-1 -Refer to Graph 7-1. What area represents total surplus in the market when the price is P1?

Suppose the price of music downloads falls. Which statement is not true?

Any goods not sold in a vegetable market at the end of the day are producer surplus.

Market failure refers to firms that go bankrupt because they do not produce the goods and services that consumers want.

Amy buys a new computer for her studies for $1200. She receives consumer surplus of $300 from the purchase. How much does Amy value her computer?

In a competitive market, sales go to those producers who are willing to supply the product with the best after-sales service.

The marginal seller is the seller who:

Lee is willing and able to pay $300 for a particular MP3 player but is able to buy it for $199. Lee's consumer surplus is:

Consumer surplus = Price of the good.

Michele is willing to pay $15 to see St Trinians for the fourth time. She finds a theatre showing St Trinians for $8.00. Michele's consumer surplus is:

Economists tend to see ticket scalping as:

Producer surplus equals:

Table A -Use the information in Table A to fill in the blanks in Table B

In all markets consumer surplus measures the economic wellbeing in that market.

According to many economists, government restrictions on ticket scalping do all of the following EXCEPT:

Ten Lessons From 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

Business Strategy

Competition Policy

Monopolistic Competition

The Markets for the Factors of Production

Earnings, Unions and Discrimination

Income Inequity and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment and the Financial System

The Natural Rate of Unemployment

The Monetary System

Inflation: Its Causes and Costs

Open-Economy Macroeconomics: Basic Concepts

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

Five Debates Over Macroeconomic Policy

Filters

Graph 7-1 -Refer to Graph 7-1. What area represents total surplus in the market when the price is P₁?