Question 1

Consumer surplus

Accepted Answer

A)  is closely related to the supply curve for a product. 
B)  is represented by a rectangle on a supply-demand graph when the demand curve is a straight, downward- sloping line. 
C)  is measured using the demand curve for a product. 
D)  does not reflect economic well-being in most markets. 
A)  is closely related to the supply curve for a product. 
B)  is represented by a rectangle on a supply-demand graph when the demand curve is a straight, downward- sloping line. 
C)  is measured using the demand curve for a product. 
D)  does not reflect economic well-being in most markets. C

Question 2

Figure 7-9  
-Refer to Figure 7-9. If the price of the good is $9.50, then producer surplus is

Accepted Answer

A)  $3.00. 
B)  $6.50. 
C)  $10.50. 
D)  $8.50. 
A)  $3.00. 
B)  $6.50. 
C)  $10.50. 
D)  $8.50. D

Question 3

Table 7-1
  
-Refer to Table 7-1. If price of the product is $135, then the total consumer surplus is

Accepted Answer

A)  $-50. 
B)  $-35. 
C)  $15. 
D)  $150. 
A)  $-50. 
B)  $-35. 
C)  $15. 
D)  $150. C

Question 4

Figure 7-24  
-Refer to Figure 7-24. At equilibrium, total surplus is

Accepted Answer

A)  $36. 
B)  $54. 
C)  $18. 
D)  $108. 
A)  $36. 
B)  $54. 
C)  $18. 
D)  $108.

Question 5

Efficiency is attained when

Accepted Answer

A)  total surplus is maximized. 
B)  producer surplus is maximized. 
C)  all resources are being used. 
D)  consumer surplus is maximized and producer surplus is minimized. 
A)  total surplus is maximized. 
B)  producer surplus is maximized. 
C)  all resources are being used. 
D)  consumer surplus is maximized and producer surplus is minimized.

Question 6

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 7

Suppose you sell a kayak for $600, but you were willing to sell it for $450. The buyer was willing to pay $650. The total surplus is $200.

Accepted Answer

A) True 
 B)False

Question 8

A consumer's willingness to pay directly measures

Accepted Answer

A)  the extent to which advertising and other external forces have influenced the consumer's preferences. 
B)  the cost of a good to the buyer. 
C)  how much a buyer values a good. 
D)  consumer surplus. 
A)  the extent to which advertising and other external forces have influenced the consumer's preferences. 
B)  the cost of a good to the buyer. 
C)  how much a buyer values a good. 
D)  consumer surplus.

Question 9

Producer surplus is the

Accepted Answer

A)  area under the supply curve to the left of the amount sold. 
B)  amount a seller is paid minus the cost of production. 
C)  area between the supply and demand curves, above the equilibrium price. 
D)  cost to sellers of participating in a market. 
A)  area under the supply curve to the left of the amount sold. 
B)  amount a seller is paid minus the cost of production. 
C)  area between the supply and demand curves, above the equilibrium price. 
D)  cost to sellers of participating in a market.

Question 10

Externalities are

Accepted Answer

A)  side effects passed on to a party other than the buyers and sellers in the market. 
B)  side effects of government intervention in markets. 
C)  external forces that cause the price of a good to be higher than it otherwise would be. 
D)  external forces that help establish equilibrium price. 
A)  side effects passed on to a party other than the buyers and sellers in the market. 
B)  side effects of government intervention in markets. 
C)  external forces that cause the price of a good to be higher than it otherwise would be. 
D)  external forces that help establish equilibrium price.

Question 11

Table 7-19
The following table shows the cost of producing a good for the only four producers in a market.
  
-Refer to Table 7-19. If these four producers bid in an auction to supply one unit to a consumer, at what price will the good be sold?

Accepted Answer

The good w

Question 12

Table 7-1
  
-Refer to Table 7-1. If the market price is $105,

Accepted Answer

A)  Calvin's consumer surplus is $45 and total consumer surplus is $85. 
B)  Sam's consumer surplus is $30 and total consumer surplus is $90. 
C)  Andrew's consumer surplus is $15 and total consumer surplus is $67.50. 
D)  Lori's consumer surplus is ­$2 and total consumer surplus is $100. 
A)  Calvin's consumer surplus is $45 and total consumer surplus is $85. 
B)  Sam's consumer surplus is $30 and total consumer surplus is $90. 
C)  Andrew's consumer surplus is $15 and total consumer surplus is $67.50. 
D)  Lori's consumer surplus is ­$2 and total consumer surplus is $100.

Question 13

Table 7-14
The only four producers in a market have the following costs:
  
-Refer to Table 7-14. If the sellers bid against each other for the right to sell the good to a single consumer, then the good will sell for

Accepted Answer

A)  $30 or slightly more. 
B)  $40 or slightly less. 
C)  $55 or slightly less. 
D)  $65 or slightly less. 
A)  $30 or slightly more. 
B)  $40 or slightly less. 
C)  $55 or slightly less. 
D)  $65 or slightly less.

Question 14

In a market, the marginal buyer is the buyer

Accepted Answer

A)  whose willingness to pay is higher than that of all other buyers and potential buyers. 
B)  whose willingness to pay is lower than that of all other buyers and potential buyers. 
C)  who is willing to buy exactly one unit of the good. 
D)  who would be the first to leave the market if the price were any higher. 
A)  whose willingness to pay is higher than that of all other buyers and potential buyers. 
B)  whose willingness to pay is lower than that of all other buyers and potential buyers. 
C)  who is willing to buy exactly one unit of the good. 
D)  who would be the first to leave the market if the price were any higher.

Question 15

Table 7-17
  
-Refer to Table 7-17. Both the demand curve and the supply curve are straight lines. At equilibrium, consumer surplus is

Accepted Answer

A)  $24. 
B)  $36. 
C)  $42. 
D)  $48. 
A)  $24. 
B)  $36. 
C)  $42. 
D)  $48.

Question 16

Figure 7-6  
-Refer to Figure 7-6. If the government imposes a price floor of $110 in this market, then consumer surplus will decrease by

Accepted Answer

A)  $200. 
B)  $400. 
C)  $600. 
D)  $800. 
A)  $200. 
B)  $400. 
C)  $600. 
D)  $800.

Question 17

Table 7-11
The following table represents the costs of five possible sellers.
  
-Refer to Table 7-11. If the market price is $1,400, the combined total cost of all participating sellers is

Accepted Answer

A)  $5,700. 
B)  $1,500. 
C)  $1,400. 
D)  $4,100. 
A)  $5,700. 
B)  $1,500. 
C)  $1,400. 
D)  $4,100.

Question 18

Figure 7-15  
-Refer to Figure 7-15. When the price rises from P1 to P2, which area represents the increase in producer surplus to existing producers?

Accepted Answer

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

Question 19

Dallas buys strawberries, and he would be willing to pay more than he now pays. Suppose that Dallas has a change in his tastes such that he values strawberries more than before. If the market price is the same as before, then

Accepted Answer

A)  Dallas's consumer surplus would be unaffected. 
B)  Dallas's consumer surplus would increase. 
C)  Dallas's consumer surplus would decrease. 
D)  Dallas would be wise to buy fewer strawberries than before. 
A)  Dallas's consumer surplus would be unaffected. 
B)  Dallas's consumer surplus would increase. 
C)  Dallas's consumer surplus would decrease. 
D)  Dallas would be wise to buy fewer strawberries than before.

Question 20

Table 7-1
  
-Refer to Table 7-1. If the price of the product is $110, then who would be willing to purchase the product?

Accepted Answer

A)  Calvin 
B)  Calvin and Sam 
C)  Calvin, Sam, and Andrew 
D)  Calvin, Sam, Andrew, and Lori 
A)  Calvin 
B)  Calvin and Sam 
C)  Calvin, Sam, and Andrew 
D)  Calvin, Sam, Andrew, and Lori

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

Consumer surplus

Figure 7-9 -Refer to Figure 7-9. If the price of the good is $9.50, then producer surplus is

Table 7-1 -Refer to Table 7-1. If price of the product is $135, then the total consumer surplus is

Figure 7-24 -Refer to Figure 7-24. At equilibrium, total surplus is

Efficiency is attained when

The marginal seller is the seller who

Suppose you sell a kayak for $600, but you were willing to sell it for $450. The buyer was willing to pay $650. The total surplus is $200.

A consumer's willingness to pay directly measures

Producer surplus is the

Externalities are

Table 7-19 The following table shows the cost of producing a good for the only four producers in a market. -Refer to Table 7-19. If these four producers bid in an auction to supply one unit to a consumer, at what price will the good be sold?

Table 7-1 -Refer to Table 7-1. If the market price is $105,

Table 7-14 The only four producers in a market have the following costs: -Refer to Table 7-14. If the sellers bid against each other for the right to sell the good to a single consumer, then the good will sell for

In a market, the marginal buyer is the buyer

Table 7-17 -Refer to Table 7-17. Both the demand curve and the supply curve are straight lines. At equilibrium, consumer surplus is

Figure 7-6 -Refer to Figure 7-6. If the government imposes a price floor of $110 in this market, then consumer surplus will decrease by

Table 7-11 The following table represents the costs of five possible sellers. -Refer to Table 7-11. If the market price is $1,400, the combined total cost of all participating sellers is

Figure 7-15 -Refer to Figure 7-15. When the price rises from P1 to P2, which area represents the increase in producer surplus to existing producers?

Dallas buys strawberries, and he would be willing to pay more than he now pays. Suppose that Dallas has a change in his tastes such that he values strawberries more than before. If the market price is the same as before, then

Table 7-1 -Refer to Table 7-1. If the price of the product is $110, then who would be willing to purchase the product?

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

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