Question 1

Figure 7-28  
-Refer to Figure 7-28.At the quantity Q2,the marginal value to buyers

Accepted Answer

A) and the marginal cost to sellers are both P2. 
B) is P2,and the marginal cost to sellers is P3. 
C) and the marginal cost to sellers are both P3. 
D) is P3,and the marginal cost to sellers is P2. 
A) and the marginal cost to sellers are both P2. 
B) is P2,and the marginal cost to sellers is P3. 
C) and the marginal cost to sellers are both P3. 
D) is P3,and the marginal cost to sellers is P2.

Question 2

Total surplus in a market will increase when the government

Accepted Answer

A) imposes a tax on that market. 
B) imposes a binding price floor on that market. 
C) removes a binding price ceiling from that market. 
D) None of the above is correct. 
A) imposes a tax on that market. 
B) imposes a binding price floor on that market. 
C) removes a binding price ceiling from that market. 
D) None of the above is correct.

Question 3

At the equilibrium price of a good,the good will be sold by those sellers

Accepted Answer

A) whose cost is more than price. 
B) whose cost is less than price. 
C) that can produce the good. 
D) enter the market first. 
A) whose cost is more than price. 
B) whose cost is less than price. 
C) that can produce the good. 
D) enter the market first.

Question 4

Figure 7-23  
-Refer to Figure 7-23.The equilibrium price is

Accepted Answer

A) P1. 
B) P2. 
C) P3. 
D) P4. 
A) P1. 
B) P2. 
C) P3. 
D) P4.

Question 5

Figure 7-25  
-Refer to Figure 7-25.Suppose the government imposes a price ceiling of $16 in this market.If the buyers with the highest willingness to pay purchase the good,then total surplus will be

Accepted Answer

A) $256. 
B) $768. 
C) $1,024. 
D) $1,280. 
A) $256. 
B) $768. 
C) $1,024. 
D) $1,280.

Question 6

Many economists believe that restrictions against ticket scalping result in each of the following except

Accepted Answer

A) a smaller audience for cultural and sporting events. 
B) shorter lines at cultural and sporting events. 
C) less tax revenue for the state. 
D) an increase in ticket prices. 
A) a smaller audience for cultural and sporting events. 
B) shorter lines at cultural and sporting events. 
C) less tax revenue for the state. 
D) an increase in ticket prices.

Question 7

Figure 7-24  
-Refer to Figure 7-24.If 6 units of the good are produced and sold,then

Accepted Answer

A) efficiency is achieved in this market. 
B) the marginal value to buyers equals the marginal cost to sellers. 
C) the sum of consumer surplus and producer surplus is maximized. 
D) All of the above are correct. 
A) efficiency is achieved in this market. 
B) the marginal value to buyers equals the marginal cost to sellers. 
C) the sum of consumer surplus and producer surplus is maximized. 
D) All of the above are correct.

Question 8

Economists say that a market where goods are not consumed by those valuing the goods most highly is

Accepted Answer

A) laissez-faire.. 
B) unequal. 
C) inefficient. 
D) rational. 
A) laissez-faire.. 
B) unequal. 
C) inefficient. 
D) rational.

Question 9

Figure 7-23  
-Refer to Figure 7-23.If the price were P1,producer surplus would be represented by the area

Accepted Answer

A) F. 
B) F+G. 
C) D+H+F. 
D) D+H+F+G+I. 
A) F. 
B) F+G. 
C) D+H+F. 
D) D+H+F+G+I.

Question 10

Figure 7-24  
-Refer to Figure 7-24.If 6 units of the good are produced and sold,then

Accepted Answer

A) consumer surplus is greater than producer surplus. 
B) producer surplus is maximized. 
C) the sum of consumer surplus and producer surplus is maximized. 
D) consumer surplus equals producer surplus. 
A) consumer surplus is greater than producer surplus. 
B) producer surplus is maximized. 
C) the sum of consumer surplus and producer surplus is maximized. 
D) consumer surplus equals producer surplus.

Question 11

Figure 7-22  
-Refer to Figure 7-22.The efficient price is

Accepted Answer

A) $80,and the efficient quantity is 50. 
B) $70,and the efficient quantity is 60. 
C) $70,and the efficient quantity is 100. 
D) $50,and the efficient quantity is 60. 
A) $80,and the efficient quantity is 50. 
B) $70,and the efficient quantity is 60. 
C) $70,and the efficient quantity is 100. 
D) $50,and the efficient quantity is 60.

Question 12

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 13

Total surplus is represented by the area below the

Accepted Answer

A) demand curve and above the price. 
B) price and up to the point of equilibrium. 
C) demand curve and above the supply curve,up to the equilibrium quantity. 
D) demand curve and above the horizontal axis,up to the equilibrium quantity. 
A) demand curve and above the price. 
B) price and up to the point of equilibrium. 
C) demand curve and above the supply curve,up to the equilibrium quantity. 
D) demand curve and above the horizontal axis,up to the equilibrium quantity.

Question 14

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

Accepted Answer

A) $288. 
B) $576. 
C) $1,152. 
D) $2,304. 
A) $288. 
B) $576. 
C) $1,152. 
D) $2,304.

Question 15

Consumer surplus equals the

Accepted Answer

A) value to buyers minus the amount paid by buyers. 
B) value to buyers minus the cost to sellers. 
C) amount received by sellers minus the cost to sellers. 
D) amount received by sellers minus the amount paid by buyers. 
A) value to buyers minus the amount paid by buyers. 
B) value to buyers minus the cost to sellers. 
C) amount received by sellers minus the cost to sellers. 
D) amount received by sellers minus the amount paid by buyers.

Question 16

A simultaneous decrease in both the demand for MP3 players and the supply of MP3 players would imply that

Accepted Answer

A) both the value of MP3 players to consumers and the cost of producing MP3 players has increased. 
B) both the value of MP3 players to consumers and the cost of producing MP3 players has decreased. 
C) the value of MP3 players to consumers has decreased,and the cost of producing MP3 players has increased. 
D) the value of MP3 players to consumers has increased,and the cost of producing MP3 players has decreased. 
A) both the value of MP3 players to consumers and the cost of producing MP3 players has increased. 
B) both the value of MP3 players to consumers and the cost of producing MP3 players has decreased. 
C) the value of MP3 players to consumers has decreased,and the cost of producing MP3 players has increased. 
D) the value of MP3 players to consumers has increased,and the cost of producing MP3 players has decreased.

Question 17

Figure 7-22  
-Refer to Figure 7-22.If 110 units of the good are bought and sold,then

Accepted Answer

A) the marginal cost to sellers is equal to the marginal value to buyers. 
B) the marginal value to buyers is greater than the marginal cost to sellers. 
C) the marginal cost to buyers is greater than marginal value to sellers. 
D) producer surplus is greater than consumer surplus. 
A) the marginal cost to sellers is equal to the marginal value to buyers. 
B) the marginal value to buyers is greater than the marginal cost to sellers. 
C) the marginal cost to buyers is greater than marginal value to sellers. 
D) producer surplus is greater than consumer surplus.

Question 18

Figure 7-21  
-Refer to Figure 7-21.When the price is P1,area B+C represents

Accepted Answer

A) total surplus. 
B) producer surplus. 
C) consumer surplus. 
D) None of the above is correct. 
A) total surplus. 
B) producer surplus. 
C) consumer surplus. 
D) None of the above is correct.

Question 19

Figure 7-21  
-Refer to Figure 7-21.Which area represents total surplus in the market when the price is P1?

Accepted Answer

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

Question 20

Figure 7-22  
-Refer to Figure 7-22.Assume demand increases,which causes the equilibrium price to increase from $50 to $70.The increase in producer surplus due to new producers entering the market would be

Accepted Answer

A) $400. 
B) $800. 
C) $1,200. 
D) $900. 
A) $400. 
B) $800. 
C) $1,200. 
D) $900.

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

Figure 7-28 -Refer to Figure 7-28.At the quantity Q2,the marginal value to buyers

Total surplus in a market will increase when the government

At the equilibrium price of a good,the good will be sold by those sellers

Figure 7-23 -Refer to Figure 7-23.The equilibrium price is

Figure 7-25 -Refer to Figure 7-25.Suppose the government imposes a price ceiling of $16 in this market.If the buyers with the highest willingness to pay purchase the good,then total surplus will be

Many economists believe that restrictions against ticket scalping result in each of the following except

Figure 7-24 -Refer to Figure 7-24.If 6 units of the good are produced and sold,then

Economists say that a market where goods are not consumed by those valuing the goods most highly is

Figure 7-23 -Refer to Figure 7-23.If the price were P1,producer surplus would be represented by the area

Figure 7-24 -Refer to Figure 7-24.If 6 units of the good are produced and sold,then

Figure 7-22 -Refer to Figure 7-22.The efficient price is

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

Total surplus is represented by the area below the

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

Consumer surplus equals the

A simultaneous decrease in both the demand for MP3 players and the supply of MP3 players would imply that

Figure 7-22 -Refer to Figure 7-22.If 110 units of the good are bought and sold,then

Figure 7-21 -Refer to Figure 7-21.When the price is P1,area B+C represents

Figure 7-21 -Refer to Figure 7-21.Which area represents total surplus in the market when the price is P1?

Figure 7-22 -Refer to Figure 7-22.Assume demand increases,which causes the equilibrium price to increase from $50 to $70.The increase in producer surplus due to new producers entering the market would be

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A