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

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

Figure 7-1 -Refer to Figure 7-1. If the price of the good is $50, then consumer surplus amounts to

Suppose John's cost for performing some carpentry work is $120. If John is paid $200 for the carpentry work, what is his producer surplus?

The particular price that results in quantity supplied being equal to quantity demanded is the best price because it

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. Which of the following graphs represents the market supply curve?

Which of the following will cause a decrease in producer surplus?

Total surplus

Producer surplus equals the

Hot dogs and hot dog buns are complements. An increase in the price of flour used to make hot dogs buns will

At present, the maximum legal price for a human kidney is $0. The price of $0 maximizes

If a market is allowed to adjust freely to its equilibrium price and quantity, then an increase in demand will

Table 7-6 For each of three potential buyers of apples, the table displays the willingness to pay for the first three apples of the day. Assume Xavier, Yadier, and Zavi are the only three buyers of apples, and only three apples can be supplied per day. -Refer to Table 7-6. If the market price of an apple is $1.40, then the market quantity of apples demanded per day is

Scenario 7-2 Suppose market demand and market supply are given by the equations: -Refer to Scenario 7-2. Suppose a reduction in input prices shifts the market supply curve to By how much does total consumer surplus increase for those consumers who were already willing to purchase the good with the original supply curve?

Suppose Katie, Kendra, and Kristen each purchase a particular type of cell phone at a price of $80. Katie's willingness to pay was $100, Kendra's willingness to pay was $95, and Kristen's willingness to pay was $80. Which of the following statements is correct?

Suppose you buy an iPod for $100. If your consumer surplus is $30, your willingness to pay is $70.

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

Free markets allocate (a) the supply of goods to the buyers who value them most highly and (b) the demand for goods to the sellers who can produce them at least cost.

Figure 7-10 -Refer to Figure 7-10. Which area represents producer surplus when the price is P2?

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.

Figure 7-25 -Refer to Figure 7-25. At the equilibrium price, total surplus is