Question 1

In what way(s) are free-market outcomes, where supply equals demand, beneficial to society?

Accepted Answer

The free-market outcome is beneficial in

Question 2

Graph 7-2
  
-Refer to Graph 7-2. When the price rises from P1 to P2, consumer surplus:

Accepted Answer

A)  increases by an amount equal to A 
B)  decreases by an amount equal to B + C 
C)  increases by an amount equal to B + C 
D)  decreases by an amount equal to C 
A)  increases by an amount equal to A 
B)  decreases by an amount equal to B + C 
C)  increases by an amount equal to B + C 
D)  decreases by an amount equal to C

Question 3

Table A
  
-Use the information in Table A to graph a demand curve for this product.
Table B

Accepted Answer

@#IMG-DLM& This question could

Question 4

Restrictions against ticket scalping actually drive up the cost of many tickets.

Accepted Answer

A) True 
 B)False

Question 5

Positive analysis refers to what:

Accepted Answer

A)  is 
B)  should be 
C)  could be 
D)  is politically correct 
A)  is 
B)  should be 
C)  could be 
D)  is politically correct

Question 6

Table C
  
-Use the information in Table C to graph a supply curve for this product.

Accepted Answer

@#IMG-DLM& This question could

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Graph 7-4
  
-In Graph 7-4, at the market-clearing equilibrium, total producer surplus is represented by the area:

Accepted Answer

A)  F 
B)  F + G 
C)  D + E + F 
D)  D + E + F + G + H 
A)  F 
B)  F + G 
C)  D + E + F 
D)  D + E + F + G + H

Question 9

To measure the total consumer surplus in a market, the area above the demand curve is added to the area below the price.

Accepted Answer

A) True 
 B)False

Question 10

Graph 7-3
  
-According to Graph 7-3, at the price P1, producer surplus is:

Accepted Answer

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

Question 11

In most markets consumer surplus:

Accepted Answer

A)  reflects economic wellbeing 
B)  reflects the total value that buyers place on goods or services 
C)  reflects the benefit to buyers mandated by government 
D)  all of the above are correct 
A)  reflects economic wellbeing 
B)  reflects the total value that buyers place on goods or services 
C)  reflects the benefit to buyers mandated by government 
D)  all of the above are correct

Question 12

Khan is a financial analyst and provides a consultancy service. He charges clients $2000 per day. His producer surplus is $1200. Khan's willingness to sell is:

Accepted Answer

A)  $0 
B)  $800 
C)  $1200 
D)  $2000 
A)  $0 
B)  $800 
C)  $1200 
D)  $2000

Question 13

Donald produces nails at a cost of $200 per ton. If he sells the nails for $500 per ton, his producer surplus is:

Accepted Answer

A)  $200 per ton 
B)  $300 per ton 
C)  $500 per ton 
D)  $700 per ton 
A)  $200 per ton 
B)  $300 per ton 
C)  $500 per ton 
D)  $700 per ton

Question 14

Laissez-faire is a French expression that literally means 'let the market fare well'.

Accepted Answer

A) True 
 B)False

Question 15

Table 7-1
This table refers to five possible buyers' willingness to pay for good Z.
  
-Refer to Table 7-1. If the market price is $5.50, the consumer surplus in the market will be:

Accepted Answer

A)  $3.00 
B)  $4.50 
C)  $15.50 
D)  $21.00 
A)  $3.00 
B)  $4.50 
C)  $15.50 
D)  $21.00

Question 16

Producer surplus is the:

Accepted Answer

A)  amount represented by the area under the demand curve 
B)  amount a seller is paid less the cost of production 
C)  amount represented by the area under the supply curve 
D)  amount a seller is paid plus the cost of production 
A)  amount represented by the area under the demand curve 
B)  amount a seller is paid less the cost of production 
C)  amount represented by the area under the supply curve 
D)  amount a seller is paid plus the cost of production

Question 17

Graph 7-4
  
-In Graph 7-4, at the market-clearing equilibrium, total consumer surplus is represented by the area:

Accepted Answer

A)  A 
B)  A + B + C 
C)  D + E + F 
D)  A + B + C + D + E + F 
A)  A 
B)  A + B + C 
C)  D + E + F 
D)  A + B + C + D + E + F

Question 18

A demand curve reflects each of the following EXCEPT the:

Accepted Answer

A)  ability of buyers to obtain the quantity they desire 
B)  willingness to pay of all buyers in the market 
C)  value each buyer in the market places on the good 
D)  highest price buyers are willing to pay for each quantity 
A)  ability of buyers to obtain the quantity they desire 
B)  willingness to pay of all buyers in the market 
C)  value each buyer in the market places on the good 
D)  highest price buyers are willing to pay for each quantity

Question 19

Would a market that was characterised by unregulated pollution be classed as efficient? Why or why not?

Accepted Answer

An efficient market assumes that the mar

Question 20

Graph 7-3
  
-According to Graph 7-3, when the price falls from P2 to P1, producer surplus:

Accepted Answer

A)  decreases by an amount equal to A 
B)  decreases by an amount equal to A + C 
C)  decreases by an amount equal to A + B 
D)  increases by an amount equal to A + B 
A)  decreases by an amount equal to A 
B)  decreases by an amount equal to A + C 
C)  decreases by an amount equal to A + B 
D)  increases by an amount equal to A + B

Exam 7: Consumers, Producers and the Efficiency of Markets

In what way(s) are free-market outcomes, where supply equals demand, beneficial to society?

Graph 7-2 -Refer to Graph 7-2. When the price rises from P1 to P2, consumer surplus:

Table A -Use the information in Table A to graph a demand curve for this product. Table B

Restrictions against ticket scalping actually drive up the cost of many tickets.

Positive analysis refers to what:

Table C -Use the information in Table C to graph a supply curve for this product.

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

Graph 7-4 -In Graph 7-4, at the market-clearing equilibrium, total producer surplus is represented by the area:

To measure the total consumer surplus in a market, the area above the demand curve is added to the area below the price.

Graph 7-3 -According to Graph 7-3, at the price P1, producer surplus is:

In most markets consumer surplus:

Khan is a financial analyst and provides a consultancy service. He charges clients $2000 per day. His producer surplus is $1200. Khan's willingness to sell is:

Donald produces nails at a cost of $200 per ton. If he sells the nails for $500 per ton, his producer surplus is:

Laissez-faire is a French expression that literally means 'let the market fare well'.

Table 7-1 This table refers to five possible buyers' willingness to pay for good Z. -Refer to Table 7-1. If the market price is $5.50, the consumer surplus in the market will be:

Producer surplus is the:

Graph 7-4 -In Graph 7-4, at the market-clearing equilibrium, total consumer surplus is represented by the area:

A demand curve reflects each of the following EXCEPT the:

Would a market that was characterised by unregulated pollution be classed as efficient? Why or why not?

Graph 7-3 -According to Graph 7-3, when the price falls from P2 to P1, producer surplus:

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 7-2 -Refer to Graph 7-2. When the price rises from P₁ to P₂, consumer surplus:

Graph 7-3 -According to Graph 7-3, at the price P₁, producer surplus is:

Graph 7-3 -According to Graph 7-3, when the price falls from P₂ to P₁, producer surplus: