Question 1

If the demand for a good or service increases,producer surplus

Accepted Answer

A)  increases. 
B)  decreases. 
C)  remains the same. 
D)  may increase,decrease,or remain the same. 
A)  increases. 
B)  decreases. 
C)  remains the same. 
D)  may increase,decrease,or remain the same.

Question 2

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

Accepted Answer

A)  $500. 
B)  $3,000. 
C)  $3,500. 
D)  $6,500. 
A)  $500. 
B)  $3,000. 
C)  $3,500. 
D)  $6,500.

Question 3

Total surplus in a market is equal to

Accepted Answer

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

Question 4

Table 7-9
  
-Refer to Table 7-9.Both the demand curve and the supply curve are straight lines.If the price is $8 but only 4 units are bought and sold,consumer surplus will be

Accepted Answer

A)  $8. 
B)  $12. 
C)  $16. 
D)  $18. 
A)  $8. 
B)  $12. 
C)  $16. 
D)  $18.

Question 5

Consumer surplus can be measured as the area between the demand curve and the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 6

Chad is willing to pay $5.00 to get his first cup of morning latté.He buys a cup from a vendor selling latté for $3.75 per cup.Chad's consumer surplus is

Accepted Answer

A)  $8.75. 
B)  $5.00. 
C)  $3.75. 
D)  $1.25. 
A)  $8.75. 
B)  $5.00. 
C)  $3.75. 
D)  $1.25.

Question 7

Figure 7-15  
-Refer to Figure 7-15.At the equilibrium price,consumer 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 8

Which of the following statements is not correct about a market in equilibrium?

Accepted Answer

A)  The price determines which buyers and which sellers participate in the market. 
B)  Those buyers who value the good more than the price choose to buy the good. 
C)  Those sellers whose costs are less than the price choose to produce and sell the good. 
D)  Consumer surplus will be equal to producer surplus. 
A)  The price determines which buyers and which sellers participate in the market. 
B)  Those buyers who value the good more than the price choose to buy the good. 
C)  Those sellers whose costs are less than the price choose to produce and sell the good. 
D)  Consumer surplus will be equal to producer surplus.

Question 9

Producer surplus equals the

Accepted Answer

A)  value to buyers minus the amount paid by buyers. 
B)  value to buyers minus the cost to sellers. 
C)  amount received by sellers minus the cost to sellers. 
D)  amount received by sellers minus the amount paid by buyers. 
A)  value to buyers minus the amount paid by buyers. 
B)  value to buyers minus the cost to sellers. 
C)  amount received by sellers minus the cost to sellers. 
D)  amount received by sellers minus the amount paid by buyers.

Question 10

We can say that the allocation of resources is efficient if

Accepted Answer

A)  producer surplus is maximized. 
B)  consumer surplus is maximized. 
C)  total surplus is maximized. 
D)  sellers' costs are minimized. 
A)  producer surplus is maximized. 
B)  consumer surplus is maximized. 
C)  total surplus is maximized. 
D)  sellers' costs are minimized.

Question 11

Table 7-9
  
-Refer to Table 7-9.At a price of $4.00,total surplus is

Accepted Answer

A)  more than it would be at the equilibrium price. 
B)  less than it would be at the equilibrium price. 
C)  the same as it would be at the equilibrium price. 
D)  There is insufficient information to make this determination. 
A)  more than it would be at the equilibrium price. 
B)  less than it would be at the equilibrium price. 
C)  the same as it would be at the equilibrium price. 
D)  There is insufficient information to make this determination.

Question 12

Figure 7-18  
-Refer to Figure 7-18.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 13

Figure 7-12  
-Refer to Figure 7-12.If the government imposes a price floor of $70 in this market,then total surplus will be

Accepted Answer

A)  $0. 
B)  $125. 
C)  $375. 
D)  $500. 
A)  $0. 
B)  $125. 
C)  $375. 
D)  $500.

Question 14

Table 7-4
The numbers in Table 7-1 reveal the maximum willingness to pay for a ticket to a Chicago Cubs vs.St.Louis Cardinal's baseball game at Wrigley Field.
  
-Refer to Table 7-4.If you have a ticket that you sell to the group in an auction,who will buy the ticket?

Accepted Answer

A)  Dan 
B)  David 
C)  Ken 
D)  Lisa 
A)  Dan 
B)  David 
C)  Ken 
D)  Lisa

Question 15

Suppose Chris and Laura attend a charity benefit and participate in a silent auction.Each has in mind a maximum amount that he or she will bid for an oil painting by a locally famous artist.This maximum is called

Accepted Answer

A)  deadweight loss. 
B)  willingness to pay. 
C)  consumer surplus. 
D)  producer surplus. 
A)  deadweight loss. 
B)  willingness to pay. 
C)  consumer surplus. 
D)  producer surplus.

Question 16

Figure 7-17  
-Refer to Figure 7-17.At equilibrium,total 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 17

Total surplus in a market is consumer surplus minus producer surplus.

Accepted Answer

A) True 
 B)False

Question 18

Figure 7-16  
-Refer to Figure 7-16.If the price were P1,producer surplus would be represented by the area

Accepted Answer

A)  F. 
B)  F+G. 
C)  D+H+F. 
D)  D+H+F+G+I. 
A)  F. 
B)  F+G. 
C)  D+H+F. 
D)  D+H+F+G+I.

Question 19

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

Accepted Answer

A)  $150. 
B)  $200. 
C)  $300. 
D)  $500. 
A)  $150. 
B)  $200. 
C)  $300. 
D)  $500.

Question 20

Economists argue that restrictions against ticket scalping actually drive up the cost of many tickets.

Accepted Answer

A) True 
 B)False

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

If the demand for a good or service increases,producer surplus

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

Total surplus in a market is equal to

Table 7-9 -Refer to Table 7-9.Both the demand curve and the supply curve are straight lines.If the price is $8 but only 4 units are bought and sold,consumer surplus will be

Consumer surplus can be measured as the area between the demand curve and the equilibrium price.

Chad is willing to pay $5.00 to get his first cup of morning latté.He buys a cup from a vendor selling latté for $3.75 per cup.Chad's consumer surplus is

Figure 7-15 -Refer to Figure 7-15.At the equilibrium price,consumer surplus is

Which of the following statements is not correct about a market in equilibrium?

Producer surplus equals the

We can say that the allocation of resources is efficient if

Table 7-9 -Refer to Table 7-9.At a price of $4.00,total surplus is

Figure 7-18 -Refer to Figure 7-18.Sellers whose costs are less than the equilibrium price are represented by which line segment?

Figure 7-12 -Refer to Figure 7-12.If the government imposes a price floor of $70 in this market,then total surplus will be

Table 7-4 The numbers in Table 7-1 reveal the maximum willingness to pay for a ticket to a Chicago Cubs vs.St.Louis Cardinal's baseball game at Wrigley Field. -Refer to Table 7-4.If you have a ticket that you sell to the group in an auction,who will buy the ticket?

Suppose Chris and Laura attend a charity benefit and participate in a silent auction.Each has in mind a maximum amount that he or she will bid for an oil painting by a locally famous artist.This maximum is called

Figure 7-17 -Refer to Figure 7-17.At equilibrium,total surplus is measured by the area

Total surplus in a market is consumer surplus minus producer surplus.

Figure 7-16 -Refer to Figure 7-16.If the price were P1,producer surplus would be represented by the area

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

Economists argue that restrictions against ticket scalping actually drive up the cost of many tickets.

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

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality 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 Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

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