Question 1

Figure 7-3  
-Refer to Figure 7-3.If the price of the good is $6,then consumer surplus is

Accepted Answer

A)  $4. 
B)  $6. 
C)  $8. 
D)  $10. 
A)  $4. 
B)  $6. 
C)  $8. 
D)  $10.

Question 2

Figure 7-13  
-Refer to Figure 7-13.For quantities less 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 3

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

Question 4

Figure 7-11  
-Refer to Figure 7-11.When the price falls from P2 to P1,producer surplus

Accepted Answer

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

Question 5

Figure 7-9  
-Refer to Figure 7-9.If the equilibrium price is $50,what is the producer surplus?

Accepted Answer

A)  $625 
B)  $3,750 
C)  $5,625 
D)  $10,000 
A)  $625 
B)  $3,750 
C)  $5,625 
D)  $10,000

Question 6

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

Accepted Answer

A)  Consumer surplus increases. 
B)  Consumer surplus decreases. 
C)  Consumer surplus is unchanged. 
D)  Consumer surplus may increase,decrease,or remain unchanged. 
A)  Consumer surplus increases. 
B)  Consumer surplus decreases. 
C)  Consumer surplus is unchanged. 
D)  Consumer surplus may increase,decrease,or remain unchanged.

Question 7

Figure 7-17  
-Refer to Figure 7-17.At equilibrium,producer surplus is

Accepted Answer

A)  $36. 
B)  $72. 
C)  $108. 
D)  $144. 
A)  $36. 
B)  $72. 
C)  $108. 
D)  $144.

Question 8

Producer surplus directly measures

Accepted Answer

A)  the well-being of society as a whole. 
B)  the well-being of buyers and sellers. 
C)  the well-being of sellers. 
D)  sellers' willingness to sell. 
A)  the well-being of society as a whole. 
B)  the well-being of buyers and sellers. 
C)  the well-being of sellers. 
D)  sellers' willingness to sell.

Question 9

A seller's willingness to sell is

Accepted Answer

A)  measured by the seller's cost of production. 
B)  related to her supply curve,just as a buyer's willingness to buy is related to his demand curve. 
C)  less than the price received if producer surplus is a positive number. 
D)  All of the above are correct. 
A)  measured by the seller's cost of production. 
B)  related to her supply curve,just as a buyer's willingness to buy is related to his demand curve. 
C)  less than the price received if producer surplus is a positive number. 
D)  All of the above are correct.

Question 10

Producing a soccer ball costs Jake $5.He sells it to Darby for $35.Darby values the soccer ball at $50.For this transaction,the total surplus in the market is $40.

Accepted Answer

A) True 
 B)False

Question 11

The "invisible hand" refers to

Accepted Answer

A)  the marketplace guiding the self-interests of market participants into promoting general economic well-being. 
B)  the fact that social planners sometimes have to intervene,even in perfectly competitive markets,to make those markets more efficient. 
C)  the equality that results from market forces allocating the goods produced in the market. 
D)  the automatic maximization of consumer surplus in free markets. 
A)  the marketplace guiding the self-interests of market participants into promoting general economic well-being. 
B)  the fact that social planners sometimes have to intervene,even in perfectly competitive markets,to make those markets more efficient. 
C)  the equality that results from market forces allocating the goods produced in the market. 
D)  the automatic maximization of consumer surplus in free markets.

Question 12

Figure 7-13  
-Refer to Figure 7-13.Total surplus can be measured as the area

Accepted Answer

A)  JNK. 
B)  JNML. 
C)  JRL. 
D)  JNL. 
A)  JNK. 
B)  JNML. 
C)  JRL. 
D)  JNL.

Question 13

Figure 7-8  
-Refer to Figure 7-8.If the supply curve is S,the demand curve is D,and the equilibrium price is $100,what is the producer surplus?

Accepted Answer

A)  $625 
B)  $1,250 
C)  $2,500 
D)  $5,000 
A)  $625 
B)  $1,250 
C)  $2,500 
D)  $5,000

Question 14

Figure 7-11  
-Refer to Figure 7-11.When the price is P2,producer surplus is

Accepted Answer

A)  A. 
B)  A+C. 
C)  A+B+C. 
D)  D+G. 
A)  A. 
B)  A+C. 
C)  A+B+C. 
D)  D+G.

Question 15

Figure 7-17  
-Refer to Figure 7-17.If 4 units of the good are produced and sold,then

Accepted Answer

A)  the cost to sellers exceeds the value to buyers. 
B)  producer surplus is maximized. 
C)  total surplus is minimized. 
D)  the allocation of resources is inefficient. 
A)  the cost to sellers exceeds the value to buyers. 
B)  producer surplus is maximized. 
C)  total surplus is minimized. 
D)  the allocation of resources is inefficient.

Question 16

Figure 7-19  
-Refer to Figure 7-19.At the quantity Q3,

Accepted Answer

A)  the market is in equilibrium. 
B)  consumer surplus is maximized. 
C)  the sum of consumer surplus and producer surplus is maximized. 
D)  the marginal value to buyers is less than the marginal cost to sellers. 
A)  the market is in equilibrium. 
B)  consumer surplus is maximized. 
C)  the sum of consumer surplus and producer surplus is maximized. 
D)  the marginal value to buyers is less than the marginal cost to sellers.

Question 17

A buyer is willing to buy a product at a price greater than or equal to his willingness to pay,but would refuse to buy a product at a price less than his willingness to pay.

Accepted Answer

A) True 
 B)False

Question 18

Figure 7-2  
-Refer to Figure 7-2.When the price falls from P1 to P2,which area represents the increase in consumer surplus to new buyers entering the market?

Accepted Answer

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

Question 19

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 largest 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 largest producer surplus.

Question 20

Economists typically measure efficiency using

Accepted Answer

A)  the price paid by buyers. 
B)  the quantity supplied by sellers. 
C)  total surplus. 
D)  profits to firms. 
A)  the price paid by buyers. 
B)  the quantity supplied by sellers. 
C)  total surplus. 
D)  profits to firms.

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

Figure 7-3 -Refer to Figure 7-3.If the price of the good is $6,then consumer surplus is

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

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

Figure 7-11 -Refer to Figure 7-11.When the price falls from P2 to P1,producer surplus

Figure 7-9 -Refer to Figure 7-9.If the equilibrium price is $50,what is the producer surplus?

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

Figure 7-17 -Refer to Figure 7-17.At equilibrium,producer surplus is

Producer surplus directly measures

A seller's willingness to sell is

Producing a soccer ball costs Jake $5.He sells it to Darby for $35.Darby values the soccer ball at $50.For this transaction,the total surplus in the market is $40.

The "invisible hand" refers to

Figure 7-13 -Refer to Figure 7-13.Total surplus can be measured as the area

Figure 7-8 -Refer to Figure 7-8.If the supply curve is S,the demand curve is D,and the equilibrium price is $100,what is the producer surplus?

Figure 7-11 -Refer to Figure 7-11.When the price is P2,producer surplus is

Figure 7-17 -Refer to Figure 7-17.If 4 units of the good are produced and sold,then

Figure 7-19 -Refer to Figure 7-19.At the quantity Q3,

A buyer is willing to buy a product at a price greater than or equal to his willingness to pay,but would refuse to buy a product at a price less than his willingness to pay.

Figure 7-2 -Refer to Figure 7-2.When the price falls from P1 to P2,which area represents the increase in consumer surplus to new buyers entering the market?

The marginal seller is the seller who

Economists typically measure efficiency using

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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