Question 1

A demand curve reflects each of the following except the

Accepted Answer

A) willingness to pay of all buyers in the market. 
B) value each buyer in the market places on the good. 
C) highest price buyers are willing to pay for each quantity. 
D) ability of buyers to obtain the quantity they desire. 
A) willingness to pay of all buyers in the market. 
B) value each buyer in the market places on the good. 
C) highest price buyers are willing to pay for each quantity. 
D) ability of buyers to obtain the quantity they desire.

Question 2

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 3

Celine buys a new MP3 player for $90.She receives consumer surplus of $15 on her purchase if her willingness to pay is

Accepted Answer

A) $15. 
B) $90. 
C) $105. 
D) $75. 
A) $15. 
B) $90. 
C) $105. 
D) $75.

Question 4

Which of the following will cause an increase in consumer surplus?

Accepted Answer

A) an increase in the production cost of the good 
B) a technological improvement in the production of the good 
C) a decrease in the number of sellers of the good 
D) the imposition of a binding price floor in the market 
A) an increase in the production cost of the good 
B) a technological improvement in the production of the good 
C) a decrease in the number of sellers of the good 
D) the imposition of a binding price floor in the market

Question 5

Figure 7-8  
-Refer to Figure 7-8.At the equilibrium price,consumer surplus is

Accepted Answer

A) $1,050. 
B) $1,225. 
C) $1,575. 
D) $2,450. 
A) $1,050. 
B) $1,225. 
C) $1,575. 
D) $2,450.

Question 6

On a graph,the area below a demand curve and above the price measures

Accepted Answer

A) producer surplus. 
B) consumer surplus. 
C) deadweight loss. 
D) willingness to pay. 
A) producer surplus. 
B) consumer surplus. 
C) deadweight loss. 
D) willingness to pay.

Question 7

Figure 7-2  
-Refer to Figure 7-2.If the price of the good is $80,then consumer surplus amounts to

Accepted Answer

A) $110. 
B) $135. 
C) $160. 
D) $185. 
A) $110. 
B) $135. 
C) $160. 
D) $185.

Question 8

Figure 7-1  
-Refer to Figure 7-1.If the price of the good is $200,then

Accepted Answer

A) consumer surplus is $150. 
B) consumer surplus is $650. 
C) producer surplus is $650. 
D) producer surplus is $750. 
A) consumer surplus is $150. 
B) consumer surplus is $650. 
C) producer surplus is $650. 
D) producer surplus is $750.

Question 9

A drought in California destroys many red grapes.As a result of the drought,the consumer surplus in the market for red grapes

Accepted Answer

A) increases,and the consumer surplus in the market for red wine increases. 
B) increases,and the consumer surplus in the market for red wine decreases. 
C) decreases,and the consumer surplus in the market for red wine increases. 
D) decreases,and the consumer surplus in the market for red wine decreases. 
A) increases,and the consumer surplus in the market for red wine increases. 
B) increases,and the consumer surplus in the market for red wine decreases. 
C) decreases,and the consumer surplus in the market for red wine increases. 
D) decreases,and the consumer surplus in the market for red wine decreases.

Question 10

Which of the following is true when the price of a good or service rises?

Accepted Answer

A) Buyers who were already buying the good or service are better off. 
B) Some buyers exit the market. 
C) The total consumer surplus in the market increases. 
D) The total value of purchases before and after the price change is the same. 
A) Buyers who were already buying the good or service are better off. 
B) Some buyers exit the market. 
C) The total consumer surplus in the market increases. 
D) The total value of purchases before and after the price change is the same.

Question 11

Figure 7-3  
-Refer to Figure 7-3.When the price is P2,consumer surplus is

Accepted Answer

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

Question 12

Consumer surplus is equal to the

Accepted Answer

A) Value to buyers - Amount paid by buyers. 
B) Amount paid by buyers - Costs of sellers. 
C) Value to buyers - Costs of sellers. 
D) Value to buyers - Willingness to pay of buyers. 
A) Value to buyers - Amount paid by buyers. 
B) Amount paid by buyers - Costs of sellers. 
C) Value to buyers - Costs of sellers. 
D) Value to buyers - Willingness to pay of buyers.

Question 13

In which of the following circumstances would a buyer be indifferent about buying a good?

Accepted Answer

A) The amount of consumer surplus the buyer would experience as a result of buying the good is zero. 
B) The price of the good is equal to the buyer's willingness to pay for the good. 
C) The price of the good is equal to the value the buyer places on the good. 
D) All of the above are correct. 
A) The amount of consumer surplus the buyer would experience as a result of buying the good is zero. 
B) The price of the good is equal to the buyer's willingness to pay for the good. 
C) The price of the good is equal to the value the buyer places on the good. 
D) All of the above are correct.

Question 14

If a consumer places a value of $15 on a particular good and if the price of the good is $17,then the

Accepted Answer

A) consumer has consumer surplus of $2 if he or she buys the good. 
B) consumer does not purchase the good. 
C) market is not a competitive market. 
D) price of the good will fall due to market forces. 
A) consumer has consumer surplus of $2 if he or she buys the good. 
B) consumer does not purchase the good. 
C) market is not a competitive market. 
D) price of the good will fall due to market forces.

Question 15

Figure 7-4  
-Refer to Figure 7-4.Which area represents consumer surplus at a price of P2?

Accepted Answer

A) BDF 
B) AFG 
C) ABDG 
D) ABC 
A) BDF 
B) AFG 
C) ABDG 
D) ABC

Question 16

Michael values a stainless steel refrigerator for his new house at $3,500,but he succeeds in buying one for $3,000.Michael's consumer surplus is

Accepted Answer

A) $500. 
B) $3,000. 
C) $3,500. 
D) $6,500. 
A) $500. 
B) $3,000. 
C) $3,500. 
D) $6,500.

Question 17

Figure 7-2  
-Refer to Figure 7-2.If the price of the good is $100,then consumer surplus amounts to

Accepted Answer

A) $50. 
B) $75. 
C) $100. 
D) $125. 
A) $50. 
B) $75. 
C) $100. 
D) $125.

Question 18

Willingness to pay

Accepted Answer

A) measures the value that a buyer places on a good. 
B) is the amount a seller actually receives for a good minus the minimum amount the seller is willing to accept. 
C) is the maximum amount a buyer is willing to pay minus the minimum amount a seller is willing to accept. 
D) is the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. 
A) measures the value that a buyer places on a good. 
B) is the amount a seller actually receives for a good minus the minimum amount the seller is willing to accept. 
C) is the maximum amount a buyer is willing to pay minus the minimum amount a seller is willing to accept. 
D) is the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.

Question 19

Figure 7-1  
-Refer to Figure 7-1.The value of the good to consumers minus the cost of the good to consumers amounts to $325 if the price of the good is

Accepted Answer

A) $200. 
B) $150. 
C) $125. 
D) $100. 
A) $200. 
B) $150. 
C) $125. 
D) $100.

Question 20

Jeff decides that he would pay as much as $2,000 for a new laptop computer.He buys the computer and realizes a consumer surplus of $300.How much did Jeff pay for his computer?

Accepted Answer

A) $300. 
B) $1,700. 
C) $2,000. 
D) $2,300. 
A) $300. 
B) $1,700. 
C) $2,000. 
D) $2,300.

Exam 7: Consumers Producers and the Efficiency of Markets: Consumer Surplus

A demand curve reflects each of the following except the

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

Celine buys a new MP3 player for $90.She receives consumer surplus of $15 on her purchase if her willingness to pay is

Which of the following will cause an increase in consumer surplus?

Figure 7-8 -Refer to Figure 7-8.At the equilibrium price,consumer surplus is

On a graph,the area below a demand curve and above the price measures

Figure 7-2 -Refer to Figure 7-2.If the price of the good is $80,then consumer surplus amounts to

Figure 7-1 -Refer to Figure 7-1.If the price of the good is $200,then

A drought in California destroys many red grapes.As a result of the drought,the consumer surplus in the market for red grapes

Which of the following is true when the price of a good or service rises?

Figure 7-3 -Refer to Figure 7-3.When the price is P2,consumer surplus is

Consumer surplus is equal to the

In which of the following circumstances would a buyer be indifferent about buying a good?

If a consumer places a value of $15 on a particular good and if the price of the good is $17,then the

Figure 7-4 -Refer to Figure 7-4.Which area represents consumer surplus at a price of P2?

Michael values a stainless steel refrigerator for his new house at $3,500,but he succeeds in buying one for $3,000.Michael's consumer surplus is

Figure 7-2 -Refer to Figure 7-2.If the price of the good is $100,then consumer surplus amounts to

Willingness to pay

Figure 7-1 -Refer to Figure 7-1.The value of the good to consumers minus the cost of the good to consumers amounts to $325 if the price of the good is

Jeff decides that he would pay as much as $2,000 for a new laptop computer.He buys the computer and realizes a consumer surplus of $300.How much did Jeff pay for his computer?

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: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

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