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

Table 7-2 This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. -Refer to Table 7-2.Which of the following is not true?

Suppose Bart,Benjamin,and Brent each purchase a particular type of electric pencil sharpener at a price of $20.Bart's willingness to pay was $22,Benjamin's willingness to pay was $25,and Brent's willingness to pay was $30.Which of the following statements is correct?

Market power refers to the

Table 7-8 The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality. -Refer to Table 7-8.You wish to purchase 10 piano lessons,so you take bids from each of the sellers.You will not accept a bid below a seller's cost because you are concerned that the seller will not provide all 10 lessons.What bid will you accept?

Figure 7-8 -Refer to Figure 7-8.If the supply curve is S and the demand curve shifts from D to D',what is the change in producer surplus?

Suppose the demand for nachos increases.What will happen to producer surplus in the market for nachos?

Welfare economics explains which of the following in the market for DVDs?

All else equal,what happens to consumer surplus if the price of a good increases?

Figure 7-16 -Refer to Figure 7-16.The equilibrium price is

Figure 7-4 -Refer to Figure 7-4.At the equilibrium price,consumer surplus is

A seller is willing to sell a product only if the seller receives a price that is at least as great as the

In which of the following circumstances would a buyer be indifferent about buying a good?

Karen sharpens knives in her spare time for extra income.Buyers of her service are willing to pay $2.50 per knife for as many knives as Karen is willing to sharpen.On a particular day,she is willing to sharpen the first knife for $1.75,the second knife for $2.25,the third knife for $2.75,and the fourth knife for $3.25.Assume Karen is rational in deciding how many knives to sharpen.Her producer surplus is

Consumer surplus equals the

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

Figure 7-19 -Refer to Figure 7-19.At the quantity Q2,the marginal value to buyers

Figure 7-14 -Refer to Figure 7-14.Which area represents total surplus in the market when the price is P1?

If a market is allowed to move freely to its equilibrium price and quantity,then an increase in supply will

Connie can clean windows in large office buildings at a cost of $1 per window.The market price for window-cleaning services is $3 per window.If Connie cleans 100 windows,her producer surplus is $100.

Figure 7-12 -Refer to Figure 7-12.At the equilibrium price,total surplus is