Question 1

Table 7-1
  
-Refer to Table 7-1.If the price of the product is $51,then who would be willing to purchase the product?

Accepted Answer

A)  Mike 
B)  Mike and Sandy 
C)  Mike,Sandy,and Jonathan 
D)  no one 
A)  Mike 
B)  Mike and Sandy 
C)  Mike,Sandy,and Jonathan 
D)  no one

Question 2

Consumer surplus is

Accepted Answer

A)  the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. 
B)  the amount a buyer is willing to pay for a good minus the cost of producing the good. 
C)  the amount by which the quantity supplied of a good exceeds the quantity demanded of the good. 
D)  a buyer's willingness to pay for a good plus the price of the good. 
A)  the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. 
B)  the amount a buyer is willing to pay for a good minus the cost of producing the good. 
C)  the amount by which the quantity supplied of a good exceeds the quantity demanded of the good. 
D)  a buyer's willingness to pay for a good plus the price of the good.

Question 3

Figure 7-17  
-Refer to Figure 7-17.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 4

Cost is a measure of the

Accepted Answer

A)  seller's willingness to sell. 
B)  seller's producer surplus. 
C)  producer shortage. 
D)  seller's willingness to buy. 
A)  seller's willingness to sell. 
B)  seller's producer surplus. 
C)  producer shortage. 
D)  seller's willingness to buy.

Question 5

Denise values a stainless steel dishwasher for her new house at $500.The actual price of the dishwasher is $650.Denise

Accepted Answer

A)  buys the dishwasher,and on her purchase she experiences a consumer surplus of $150. 
B)  buys the dishwasher,and on her purchase she experiences a consumer surplus of $-150. 
C)  does not buy the dishwasher,and on her purchase she experiences a consumer surplus of $150. 
D)  does not buy the dishwasher,and on her purchase she experiences a consumer surplus of $0. 
A)  buys the dishwasher,and on her purchase she experiences a consumer surplus of $150. 
B)  buys the dishwasher,and on her purchase she experiences a consumer surplus of $-150. 
C)  does not buy the dishwasher,and on her purchase she experiences a consumer surplus of $150. 
D)  does not buy the dishwasher,and on her purchase she experiences a consumer surplus of $0.

Question 6

Which of the following will cause an increase in consumer surplus?

Accepted Answer

A)  an increase in the production cost of the good 
B)  a technological improvement in the production of the good 
C)  a decrease in the number of sellers of the good 
D)  the imposition of a binding price floor in the market 
A)  an increase in the production cost of the good 
B)  a technological improvement in the production of the good 
C)  a decrease in the number of sellers of the good 
D)  the imposition of a binding price floor in the market

Question 7

Figure 7-2  
-Refer to Figure 7-2.Which area represents consumer surplus at a price of P2?

Accepted Answer

A)  ABD 
B)  ACG 
C)  BCDF 
D)  DFG 
A)  ABD 
B)  ACG 
C)  BCDF 
D)  DFG

Question 8

Figure 7-18  
-Refer to Figure 7-18.Buyers who value this good more 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 9

Figure 7-13  
-Refer to Figure 7-13.For quantities greater than M,the value to the marginal buyer is

Accepted Answer

A)  greater than the cost to the marginal seller,so increasing the quantity increases total surplus. 
B)  less than the cost to the marginal seller,so increasing the quantity increases total surplus. 
C)  greater than the cost to the marginal seller,so decreasing the quantity increases total surplus. 
D)  less than the cost to the marginal seller,so decreasing the quantity increases total surplus. 
A)  greater than the cost to the marginal seller,so increasing the quantity increases total surplus. 
B)  less than the cost to the marginal seller,so increasing the quantity increases total surplus. 
C)  greater than the cost to the marginal seller,so decreasing the quantity increases total surplus. 
D)  less than the cost to the marginal seller,so decreasing the quantity increases total surplus.

Question 10

Table 7-6
The following table represents the costs of five possible sellers.
  
-Refer to Table 7-6.If the market price is $1,000,the producer surplus in the market is

Accepted Answer

A)  $700. 
B)  $750. 
C)  $2,250. 
D)  $3,700. 
A)  $700. 
B)  $750. 
C)  $2,250. 
D)  $3,700.

Question 11

Table 7-3
The only four consumers in a market have the following willingness to pay for a good:
  
-Refer to Table 7-3.Who experiences the largest loss of consumer surplus when the price of the good increases from $20 to $22?

Accepted Answer

A)  Quilana 
B)  Wilbur 
C)  Ming-la 
D)  All three buyers experience the same loss of consumer surplus. 
A)  Quilana 
B)  Wilbur 
C)  Ming-la 
D)  All three buyers experience the same loss of consumer surplus.

Question 12

Figure 7-14  
-Refer to Figure 7-14.When the price is P1,area B+C represents

Accepted Answer

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

Question 13

Consumer surplus is the

Accepted Answer

A)  amount of a good consumers get without paying anything. 
B)  amount a consumer pays minus the amount the consumer is willing to pay. 
C)  amount a consumer is willing to pay minus the amount the consumer actually pays. 
D)  value of a good to a consumer. 
A)  amount of a good consumers get without paying anything. 
B)  amount a consumer pays minus the amount the consumer is willing to pay. 
C)  amount a consumer is willing to pay minus the amount the consumer actually pays. 
D)  value of a good to a consumer.

Question 14

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

Accepted Answer

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

Question 15

The "invisible hand" is

Accepted Answer

A)  used to describe the welfare system in the United States. 
B)  a concept developed by Adam Smith to describe the virtues of free markets. 
C)  a concept used by J.M.Keynes to describe the role of government in guiding the allocation of resources in the economy. 
D)  a term used by some economists to characterize the role of government in an economy - inevitable but invisible. 
A)  used to describe the welfare system in the United States. 
B)  a concept developed by Adam Smith to describe the virtues of free markets. 
C)  a concept used by J.M.Keynes to describe the role of government in guiding the allocation of resources in the economy. 
D)  a term used by some economists to characterize the role of government in an economy - inevitable but invisible.

Question 16

Suppose that the equilibrium price in the market for widgets is $5.If a law reduced the maximum legal price for widgets to $4,

Accepted Answer

A)  any possible increase in consumer surplus would be larger than the loss of producer surplus. 
B)  any possible increase in consumer surplus would be smaller than the loss of producer surplus. 
C)  the resulting increase in producer surplus would be larger than any possible loss of consumer surplus. 
D)  the resulting increase in producer surplus would be smaller than any possible loss of consumer surplus. 
A)  any possible increase in consumer surplus would be larger than the loss of producer surplus. 
B)  any possible increase in consumer surplus would be smaller than the loss of producer surplus. 
C)  the resulting increase in producer surplus would be larger than any possible loss of consumer surplus. 
D)  the resulting increase in producer surplus would be smaller than any possible loss of consumer surplus.

Question 17

When a buyer's willingness to pay for a good is equal to the price of the good,the

Accepted Answer

A)  buyer's consumer surplus for that good is maximized. 
B)  buyer will buy as much of the good as the buyer's budget allows. 
C)  price of the good exceeds the value that the buyer places on the good. 
D)  buyer is indifferent between buying the good and not buying it. 
A)  buyer's consumer surplus for that good is maximized. 
B)  buyer will buy as much of the good as the buyer's budget allows. 
C)  price of the good exceeds the value that the buyer places on the good. 
D)  buyer is indifferent between buying the good and not buying it.

Question 18

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 19

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 increase in producer surplus due to new producers entering the market?

Accepted Answer

A)  $625 
B)  $2,500 
C)  $3,125 
D)  $5,625 
A)  $625 
B)  $2,500 
C)  $3,125 
D)  $5,625

Question 20

Consumer surplus is equal to the

Accepted Answer

A)  Value to buyers - Amount paid by buyers. 
B)  Amount paid by buyers - Costs of sellers. 
C)  Value to buyers - Costs of sellers. 
D)  Value to buyers - Willingness to pay of buyers. 
A)  Value to buyers - Amount paid by buyers. 
B)  Amount paid by buyers - Costs of sellers. 
C)  Value to buyers - Costs of sellers. 
D)  Value to buyers - Willingness to pay of buyers.

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

Table 7-1 -Refer to Table 7-1.If the price of the product is $51,then who would be willing to purchase the product?

Consumer surplus is

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

Cost is a measure of the

Denise values a stainless steel dishwasher for her new house at $500.The actual price of the dishwasher is $650.Denise

Which of the following will cause an increase in consumer surplus?

Figure 7-2 -Refer to Figure 7-2.Which area represents consumer surplus at a price of P2?

Figure 7-18 -Refer to Figure 7-18.Buyers who value this good more than the equilibrium price are represented by which line segment?

Figure 7-13 -Refer to Figure 7-13.For quantities greater than M,the value to the marginal buyer is

Table 7-6 The following table represents the costs of five possible sellers. -Refer to Table 7-6.If the market price is $1,000,the producer surplus in the market is

Table 7-3 The only four consumers in a market have the following willingness to pay for a good: -Refer to Table 7-3.Who experiences the largest loss of consumer surplus when the price of the good increases from $20 to $22?

Figure 7-14 -Refer to Figure 7-14.When the price is P1,area B+C represents

Consumer surplus is the

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

The "invisible hand" is

Suppose that the equilibrium price in the market for widgets is $5.If a law reduced the maximum legal price for widgets to $4,

When a buyer's willingness to pay for a good is equal to the price of the good,the

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

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 increase in producer surplus due to new producers entering the market?

Consumer surplus is equal to the

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

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