Question 1

Figure 7-26  
-Refer to Figure 7-26. If the government imposes a price floor of $90 in this market, then consumer surplus will be

Accepted Answer

A)  $225. 
B)  $450. 
C)  $975. 
D)  $1,350 
A)  $225. 
B)  $450. 
C)  $975. 
D)  $1,350

Question 2

Table 7-15
  
-Refer to Table 7-15. You want to hire a professional photographer to take pictures of your family. The table shows the costs of the four potential sellers in the local photography market. You take bids from the sellers. Who offers the winning bid, and what does he offer to charge for the photography session?

Accepted Answer

A)  Steve; more than $400 but less than $450 
B)  Steve; $399 
C)  LeBron; more than $700 
D)  LeBron; more than $600 but less than $700 
A)  Steve; more than $400 but less than $450 
B)  Steve; $399 
C)  LeBron; more than $700 
D)  LeBron; more than $600 but less than $700

Question 3

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 two (essentially) identical tickets that you sell to the group in an auction, what will be the selling price for each ticket?

Accepted Answer

Question 4

Producer surplus measures the

Accepted Answer

A)  benefits to sellers of participating in a market. 
B)  costs to sellers of participating in a market. 
C)  price that buyers are willing to pay for sellers' output of a good or service. 
D)  benefit to sellers of producing a greater quantity of a good or service than buyers demand. 
A)  benefits to sellers of participating in a market. 
B)  costs to sellers of participating in a market. 
C)  price that buyers are willing to pay for sellers' output of a good or service. 
D)  benefit to sellers of producing a greater quantity of a good or service than buyers demand.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Suppose Lauren, Leslie and Lydia all purchase bulletin boards for their rooms for $15 each. Lauren's willingness to pay was $35, Leslie's willingness to pay was $25, and Lydia's willingness to pay was $30. Total consumer surplus for these three would be

Accepted Answer

A)  $15. 
B)  $30. 
C)  $45. 
D)  $90. 
A)  $15. 
B)  $30. 
C)  $45. 
D)  $90.

Question 7

Figure 7-13  
-Refer to Figure 7-13. If the equilibrium price rises from $60 to $120, what is the additional producer surplus to initial producers in the market?

Accepted Answer

A)  $1,200 
B)  $2,400 
C)  $3,600 
D)  $4,800 
A)  $1,200 
B)  $2,400 
C)  $3,600 
D)  $4,800

Question 8

Figure 7-7  
-Refer to Figure 7-7. What is the consumer surplus if the price is $100?

Accepted Answer

A)  $2,500 
B)  $5,000 
C)  $10,000 
D)  $20,000 
A)  $2,500 
B)  $5,000 
C)  $10,000 
D)  $20,000

Question 9

Figure 7-11  
-Refer to Figure 7-11. If the supply curve is S and the demand curve shifts from D to D', what is the change in producer surplus?

Accepted Answer

A)  Producer surplus increases by $3,125. 
B)  Producer surplus increases by $5,625. 
C)  Producer surplus decreases by $3,125. 
D)  Producer surplus decreases by $5,625. 
A)  Producer surplus increases by $3,125. 
B)  Producer surplus increases by $5,625. 
C)  Producer surplus decreases by $3,125. 
D)  Producer surplus decreases by $5,625.

Question 10

Which of the following statements is not correct?

Accepted Answer

A)  An invisible hand leads buyers and sellers to an equilibrium that maximizes total surplus. 
B)  Market power can cause markets to be inefficient. 
C)  Externalities can cause markets to be inefficient. 
D)  The invisible hand can remedy all types of market failures. 
A)  An invisible hand leads buyers and sellers to an equilibrium that maximizes total surplus. 
B)  Market power can cause markets to be inefficient. 
C)  Externalities can cause markets to be inefficient. 
D)  The invisible hand can remedy all types of market failures.

Question 11

Figure 7-14  
-Refer to Figure 7-14. At the equilibrium price, producer surplus is

Accepted Answer

A)  $800. 
B)  $400. 
C)  $450. 
D)  $900. 
A)  $800. 
B)  $400. 
C)  $450. 
D)  $900.

Question 12

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 tickets sell for $25 each, then what is the total consumer surplus in the market?

Accepted Answer

A)  $25 
B)  $35 
C)  $60 
D)  $110 
A)  $25 
B)  $35 
C)  $60 
D)  $110

Question 13

Figure 7-19  
-Refer to Figure 7-19. At the equilibrium price, total surplus is

Accepted Answer

A)  $125. 
B)  $450. 
C)  $250. 
D)  $500. 
A)  $125. 
B)  $450. 
C)  $250. 
D)  $500.

Question 14

Scenario 7-1
Suppose market demand is given by the equation  
-Refer to Scenario 7-1. If the market equilibrium price falls from $10 to $5, what is the change in total consumer surplus in the market?

Accepted Answer

Consumer s

Question 15

Total surplus is

Accepted Answer

A)  the total cost to sellers of providing the good minus the total value of the good to buyers. 
B)  the total value of the good to buyers minus the cost to sellers of providing the good. 
C)  the difference between consumer surplus and sellers' cost. 
D)  always smaller than producer surplus. 
A)  the total cost to sellers of providing the good minus the total value of the good to buyers. 
B)  the total value of the good to buyers minus the cost to sellers of providing the good. 
C)  the difference between consumer surplus and sellers' cost. 
D)  always smaller than producer surplus.

Question 16

Total surplus in a market is equal to

Accepted Answer

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

Question 17

Moving production from a high-cost producer to a low-cost producer will

Accepted Answer

A)  lower total surplus. 
B)  raise total surplus. 
C)  lower producer surplus. 
D)  raise producer surplus but lower consumer surplus. 
A)  lower total surplus. 
B)  raise total surplus. 
C)  lower producer surplus. 
D)  raise producer surplus but lower consumer surplus.

Question 18

Figure 7-11  
-Refer to Figure 7-11. 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 19

If the cost of producing sofas decreases, then consumer surplus in the sofa market will

Accepted Answer

A)  increase. 
B)  decrease. 
C)  remain constant. 
D)  increase for some buyers and decrease for other buyers. 
A)  increase. 
B)  decrease. 
C)  remain constant. 
D)  increase for some buyers and decrease for other buyers.

Question 20

Table 7-5
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day.
  
-Refer to Table 7-5. The market quantity of oranges demanded per day is exactly 7 if the price of an orange, P, satisfies

Accepted Answer

A)  $0.60 < P < $0.75. 
B)  $0.60 < P < $2.00. 
C)  $0.25 < P < $0.75. 
D)  $0.25 < P < $0.60. 
A)  $0.60 < P < $0.75. 
B)  $0.60 < P < $2.00. 
C)  $0.25 < P < $0.75. 
D)  $0.25 < P < $0.60.

Figure 7-26 -Refer to Figure 7-26. If the government imposes a price floor of $90 in this market, then consumer surplus will be

Producer surplus measures the

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

Suppose Lauren, Leslie and Lydia all purchase bulletin boards for their rooms for $15 each. Lauren's willingness to pay was $35, Leslie's willingness to pay was $25, and Lydia's willingness to pay was $30. Total consumer surplus for these three would be

Figure 7-13 -Refer to Figure 7-13. If the equilibrium price rises from $60 to $120, what is the additional producer surplus to initial producers in the market?

Figure 7-7 -Refer to Figure 7-7. What is the consumer surplus if the price is $100?

Figure 7-11 -Refer to Figure 7-11. If the supply curve is S and the demand curve shifts from D to D', what is the change in producer surplus?

Which of the following statements is not correct?

Figure 7-14 -Refer to Figure 7-14. At the equilibrium price, producer surplus is

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 tickets sell for $25 each, then what is the total consumer surplus in the market?

Figure 7-19 -Refer to Figure 7-19. At the equilibrium price, total surplus is

Scenario 7-1 Suppose market demand is given by the equation -Refer to Scenario 7-1. If the market equilibrium price falls from $10 to $5, what is the change in total consumer surplus in the market?

Total surplus is

Total surplus in a market is equal to

Moving production from a high-cost producer to a low-cost producer will

Figure 7-11 -Refer to Figure 7-11. If the supply curve is S, the demand curve is D, and the equilibrium price is $100, what is the producer surplus?

If the cost of producing sofas decreases, then consumer surplus in the sofa market will

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

Figure 7-26 -Refer to Figure 7-26. If the government imposes a price floor of $90 in this market, then consumer surplus will be

Producer surplus measures the

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

Suppose Lauren, Leslie and Lydia all purchase bulletin boards for their rooms for $15 each. Lauren's willingness to pay was $35, Leslie's willingness to pay was $25, and Lydia's willingness to pay was $30. Total consumer surplus for these three would be

Figure 7-13 -Refer to Figure 7-13. If the equilibrium price rises from $60 to $120, what is the additional producer surplus to initial producers in the market?

Figure 7-7 -Refer to Figure 7-7. What is the consumer surplus if the price is $100?

Figure 7-11 -Refer to Figure 7-11. If the supply curve is S and the demand curve shifts from D to D', what is the change in producer surplus?

Which of the following statements is not correct?

Figure 7-14 -Refer to Figure 7-14. At the equilibrium price, producer surplus is

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 tickets sell for $25 each, then what is the total consumer surplus in the market?

Figure 7-19 -Refer to Figure 7-19. At the equilibrium price, total surplus is

Scenario 7-1 Suppose market demand is given by the equation -Refer to Scenario 7-1. If the market equilibrium price falls from $10 to $5, what is the change in total consumer surplus in the market?

Total surplus is

Total surplus in a market is equal to

Moving production from a high-cost producer to a low-cost producer will

Figure 7-11 -Refer to Figure 7-11. If the supply curve is S, the demand curve is D, and the equilibrium price is $100, what is the producer surplus?

If the cost of producing sofas decreases, then consumer surplus in the sofa market will

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

Filters