Question 1

The area ________ the market supply curve and ________ the market price is equal to the total amount of producer surplus in a market.

Accepted Answer

A)  above; above 
B)  above; below 
C)  below; above 
D)  below; below 
A)  above; above 
B)  above; below 
C)  below; above 
D)  below; below

Question 2

-Refer to Figure 5-7. As a result of the tax, is there a loss in consumer surplus?

Accepted Answer

A)  Yes, because consumers are paying a price above the economically efficient price. 
B)  No, because the producer pays the tax. 
C)  No, because the market reaches a new equilibrium. 
D)  No, because consumers are charged a lower price to cover their tax burden. 
A)  Yes, because consumers are paying a price above the economically efficient price. 
B)  No, because the producer pays the tax. 
C)  No, because the market reaches a new equilibrium. 
D)  No, because consumers are charged a lower price to cover their tax burden.

Question 3

If the quantity of fishing poles demanded is represented by the equation QD = 60 - P, then the corresponding price of fishing poles is represented by the equation

Accepted Answer

A)  P = 0.6QD + 10. 
B)  P = 60 - QD. 
C)  P = -60 + QD. 
D)  P = QD + 60. 
A)  P = 0.6QD + 10. 
B)  P = 60 - QD. 
C)  P = -60 + QD. 
D)  P = QD + 60.

Question 4

-Refer to Table 5-6. The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick. The equilibrium price and quantity for Chef Ernie's sushi are $60 and 20 thousand units. What is the value of producer surplus?

Accepted Answer

A)  $100 thousand 
B)  $200 thousand 
C)  $600 thousand 
D)  $800 thousand 
A)  $100 thousand 
B)  $200 thousand 
C)  $600 thousand 
D)  $800 thousand

Question 5

In the economic sense, almost everything is scarce. ________ of a good or service occurs when the quantity demanded is greater than the quantity supplied at the current market price.

Accepted Answer

A)  Scarcity 
B)  A shortage 
C)  A surplus 
D)  An overstock 
A)  Scarcity 
B)  A shortage 
C)  A surplus 
D)  An overstock

Question 6

-Refer to Figure 5-3. What is the value of the deadweight loss at a price of $18?

Accepted Answer

A)  $100 
B)  $180 
C)  $660 
D)  $1040 
A)  $100 
B)  $180 
C)  $660 
D)  $1040

Question 7

-Refer to Figure 5-1. If the market price is $2.00, what is the consumer surplus on the second burrito?

Accepted Answer

A)  $0 
B)  $1.00 
C)  $2.00 
D)  $4.50 
A)  $0 
B)  $1.00 
C)  $2.00 
D)  $4.50

Question 8

-Refer to Figure 5-1. If the market price is $1.00, what is the maximum number of burritos that Arnold will buy?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 9

-Refer to Table 5-6. The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick. What are the equilibrium price and quantity (in thousands) for Chef Ernie's sushi?

Accepted Answer

A)  $80 and 80 thousand 
B)  $60 and 20 thousand 
C)  $50 and 100 thousand 
D)  $40 and 50 thousand 
A)  $80 and 80 thousand 
B)  $60 and 20 thousand 
C)  $50 and 100 thousand 
D)  $40 and 50 thousand

Question 10

Which of the following statements is true?

Accepted Answer

A)  Consumer surplus measures the total benefit from participating in a market. 
B)  When a market is in equilibrium, consumer surplus equals producer surplus. 
C)  Consumer surplus measures the net benefit from participating in a market. 
D)  Producer surplus measures the total benefit received by producers from participating in a market. 
A)  Consumer surplus measures the total benefit from participating in a market. 
B)  When a market is in equilibrium, consumer surplus equals producer surplus. 
C)  Consumer surplus measures the net benefit from participating in a market. 
D)  Producer surplus measures the total benefit received by producers from participating in a market.

Question 11

The sum of consumer surplus and producer surplus is called economic surplus.

Accepted Answer

A) True 
 B)False

Question 12

-Refer to Figure 5-4. The figure above represents the market for pecans. Assume that this is a competitive market. If the price of pecans is $3, what changes in the market would result in an economically efficient output?

Accepted Answer

A)  The price would increase, the quantity supplied would decrease and the quantity demanded would increase. 
B)  The quantity supplied would increase, the quantity demanded would decrease and the equilibrium price would increase. 
C)  The price would increase, the demand would decrease and the supply would increase. 
D)  The price would increase, the quantity demanded would decrease and the quantity supplied would increase. 
A)  The price would increase, the quantity supplied would decrease and the quantity demanded would increase. 
B)  The quantity supplied would increase, the quantity demanded would decrease and the equilibrium price would increase. 
C)  The price would increase, the demand would decrease and the supply would increase. 
D)  The price would increase, the quantity demanded would decrease and the quantity supplied would increase.

Question 13

Economic surplus

Accepted Answer

A)  does not exist when a competitive market is in equilibrium. 
B)  is equal to the sum of consumer surplus and producer surplus. 
C)  is the difference between quantity demanded and quantity supplied when the market price for a product is greater than the equilibrium price. 
D)  is equal to the difference between consumer surplus and producer surplus. 
A)  does not exist when a competitive market is in equilibrium. 
B)  is equal to the sum of consumer surplus and producer surplus. 
C)  is the difference between quantity demanded and quantity supplied when the market price for a product is greater than the equilibrium price. 
D)  is equal to the difference between consumer surplus and producer surplus.

Question 14

-Refer to Figure 5-7. How much of the tax is paid by buyers?

Accepted Answer

A)  $2 
B)  $5 
C)  $7 
D)  $12 
A)  $2 
B)  $5 
C)  $7 
D)  $12

Question 15

-Refer to Figure 5-5. With rent control, the quantity supplied is 200 apartments. Suppose apartment owners ignore the law and rent this quantity for the highest rent they can get. What is the highest rent they can get per month?

Accepted Answer

A)  $1000 
B)  $1500 
C)  $2000 
D)  $2300 
A)  $1000 
B)  $1500 
C)  $2000 
D)  $2300

Question 16

-Refer to Figure 5-5. Suppose that instead of a rent ceiling, the government imposed a price floor of $2000 per month for apartments. What is the value of the portion of consumer surplus transferred to producers as a result of the price floor?

Accepted Answer

A)  $40 000 
B)  $100 000 
C)  $125 000 
D)  $140 000 
A)  $40 000 
B)  $100 000 
C)  $125 000 
D)  $140 000

Question 17

If, in a competitive market, marginal benefit is less than marginal cost,

Accepted Answer

A)  the net benefit to consumers from participating in the market is less than the net benefit to producers. 
B)  the government must force producers to raise prices in order to achieve economic efficiency. 
C)  the quantity sold is greater than the equilibrium quantity. 
D)  the quantity sold is less than the equilibrium quantity. 
A)  the net benefit to consumers from participating in the market is less than the net benefit to producers. 
B)  the government must force producers to raise prices in order to achieve economic efficiency. 
C)  the quantity sold is greater than the equilibrium quantity. 
D)  the quantity sold is less than the equilibrium quantity.

Question 18

-Refer to Figure 5-1. What is the total amount that Arnold is willing to pay for 3 burritos?

Accepted Answer

A)  $1.50 
B)  $6.00 
C)  $7.00 
D)  $10.00 
A)  $1.50 
B)  $6.00 
C)  $7.00 
D)  $10.00

Question 19

-Refer to Table 5-4. If a minimum wage of $11.50 an hour is mandated, what is the quantity of labour demanded?

Accepted Answer

A)  40 000 
B)  570 000 
C)  610 000 
D)  1 180 000 
A)  40 000 
B)  570 000 
C)  610 000 
D)  1 180 000

Question 20

-Refer to Figure 5-5. What is the value of consumer surplus after the imposition of the ceiling?

Accepted Answer

A)  $120 000 
B)  $230 000 
C)  $270 000 
D)  $430 000 
A)  $120 000 
B)  $230 000 
C)  $270 000 
D)  $430 000

The area the market supply curve and the market price is equal to the total amount of producer surplus in a market.

-Refer to Figure 5-7. As a result of the tax, is there a loss in consumer surplus?

If the quantity of fishing poles demanded is represented by the equation Q_D = 60 - P, then the corresponding price of fishing poles is represented by the equation

-Refer to Table 5-6. The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick. The equilibrium price and quantity for Chef Ernie's sushi are $60 and 20 thousand units. What is the value of producer surplus?

In the economic sense, almost everything is scarce. ________ of a good or service occurs when the quantity demanded is greater than the quantity supplied at the current market price.

-Refer to Figure 5-3. What is the value of the deadweight loss at a price of $18?

-Refer to Figure 5-1. If the market price is $2.00, what is the consumer surplus on the second burrito?

-Refer to Figure 5-1. If the market price is $1.00, what is the maximum number of burritos that Arnold will buy?

-Refer to Table 5-6. The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick. What are the equilibrium price and quantity (in thousands) for Chef Ernie's sushi?

Which of the following statements is true?

The sum of consumer surplus and producer surplus is called economic surplus.

-Refer to Figure 5-4. The figure above represents the market for pecans. Assume that this is a competitive market. If the price of pecans is $3, what changes in the market would result in an economically efficient output?

Economic surplus

-Refer to Figure 5-7. How much of the tax is paid by buyers?

-Refer to Figure 5-5. With rent control, the quantity supplied is 200 apartments. Suppose apartment owners ignore the law and rent this quantity for the highest rent they can get. What is the highest rent they can get per month?

-Refer to Figure 5-5. Suppose that instead of a rent ceiling, the government imposed a price floor of $2000 per month for apartments. What is the value of the portion of consumer surplus transferred to producers as a result of the price floor?

If, in a competitive market, marginal benefit is less than marginal cost,

-Refer to Figure 5-1. What is the total amount that Arnold is willing to pay for 3 burritos?

-Refer to Table 5-4. If a minimum wage of $11.50 an hour is mandated, what is the quantity of labour demanded?

-Refer to Figure 5-5. What is the value of consumer surplus after the imposition of the ceiling?

Economics Foundations and Models

Choices and Trade - Offs in the Market

Where Prices Come Frome : The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Concumer Choice and Behavioural Economics

Technology , Production and Costs

Firms in Perfectly Compitive Markets

Monopoly Markets

Monopolistic Competition : The Competitive Model in More Realistic Setting

Oligopoly : Firms in Less Competitve Markets

The Market for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities , Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

Exam 5: Economic Efficiency , Government Price Setting and Taxes

The area ________ the market supply curve and ________ the market price is equal to the total amount of producer surplus in a market.

-Refer to Figure 5-7. As a result of the tax, is there a loss in consumer surplus?

If the quantity of fishing poles demanded is represented by the equation QD = 60 - P, then the corresponding price of fishing poles is represented by the equation

-Refer to Table 5-6. The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick. The equilibrium price and quantity for Chef Ernie's sushi are $60 and 20 thousand units. What is the value of producer surplus?

In the economic sense, almost everything is scarce. ________ of a good or service occurs when the quantity demanded is greater than the quantity supplied at the current market price.

-Refer to Figure 5-3. What is the value of the deadweight loss at a price of $18?

-Refer to Figure 5-1. If the market price is $2.00, what is the consumer surplus on the second burrito?

-Refer to Figure 5-1. If the market price is $1.00, what is the maximum number of burritos that Arnold will buy?

-Refer to Table 5-6. The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick. What are the equilibrium price and quantity (in thousands) for Chef Ernie's sushi?

Which of the following statements is true?

The sum of consumer surplus and producer surplus is called economic surplus.

-Refer to Figure 5-4. The figure above represents the market for pecans. Assume that this is a competitive market. If the price of pecans is $3, what changes in the market would result in an economically efficient output?

Economic surplus

-Refer to Figure 5-7. How much of the tax is paid by buyers?

-Refer to Figure 5-5. With rent control, the quantity supplied is 200 apartments. Suppose apartment owners ignore the law and rent this quantity for the highest rent they can get. What is the highest rent they can get per month?

-Refer to Figure 5-5. Suppose that instead of a rent ceiling, the government imposed a price floor of $2000 per month for apartments. What is the value of the portion of consumer surplus transferred to producers as a result of the price floor?

If, in a competitive market, marginal benefit is less than marginal cost,

-Refer to Figure 5-1. What is the total amount that Arnold is willing to pay for 3 burritos?

-Refer to Table 5-4. If a minimum wage of $11.50 an hour is mandated, what is the quantity of labour demanded?

-Refer to Figure 5-5. What is the value of consumer surplus after the imposition of the ceiling?

Economics Foundations and Models

Choices and Trade - Offs in the Market

Where Prices Come Frome : The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Concumer Choice and Behavioural Economics

Technology , Production and Costs

Firms in Perfectly Compitive Markets

Monopoly Markets

Monopolistic Competition : The Competitive Model in More Realistic Setting

Oligopoly : Firms in Less Competitve Markets

The Market for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities , Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

The area the market supply curve and the market price is equal to the total amount of producer surplus in a market.

If the quantity of fishing poles demanded is represented by the equation Q_D = 60 - P, then the corresponding price of fishing poles is represented by the equation