Question 1

Consumer surplus can be measured as the area between the demand curve and the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 2

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 3

Figure 7-14  
-Refer to Figure 7-14. If the government imposes a price ceiling of $50 in this market, then the new producer surplus will be

Accepted Answer

A)  $200. 
B)  $100. 
C)  $125. 
D)  $250. 
A)  $200. 
B)  $100. 
C)  $125. 
D)  $250.

Question 4

According to many economists, government restrictions on ticket scalping do all of the following except

Accepted Answer

A)  inconvenience the public. 
B)  reduce the audience for cultural and sports events. 
C)  waste police officers' time. 
D)  keep the cost of tickets to all consumers low. 
A)  inconvenience the public. 
B)  reduce the audience for cultural and sports events. 
C)  waste police officers' time. 
D)  keep the cost of tickets to all consumers low.

Question 5

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 6

Figure 7-24  
-Refer to Figure 7-24. If the government imposes a price ceiling at $12, then producer surplus is

Accepted Answer

A)  CDI. 
B)  BDF. 
C)  BCIF. 
D)  HGCD. 
A)  CDI. 
B)  BDF. 
C)  BCIF. 
D)  HGCD.

Question 7

Figure 7-15  
-Refer to Figure 7-15. When the price is P1, producer surplus is

Accepted Answer

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

Question 8

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. If the market price of an orange increases from $0.80 to $1.05, then consumer surplus

Accepted Answer

A)  increases by $0.75. 
B)  decreases by $0.95. 
C)  decreases by $0.75. 
D)  decreases by $1.00. 
A)  increases by $0.75. 
B)  decreases by $0.95. 
C)  decreases by $0.75. 
D)  decreases by $1.00.

Question 9

Table 7-13
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
  
-Refer to Table 7-13. The equilibrium market price for 10 piano lessons is $400. What is the total producer surplus in the market?

Accepted Answer

A)  $0 
B)  $300 
C)  $400 
D)  $700 
A)  $0 
B)  $300 
C)  $400 
D)  $700

Question 10

Which of the following statements is not correct about a market in equilibrium?

Accepted Answer

A)  The price determines which buyers and which sellers participate in the market. 
B)  Those buyers who value the good more than the price choose to buy the good. 
C)  Those sellers whose costs are less than the price choose to produce and sell the good. 
D)  Consumer surplus will be equal to producer surplus. 
A)  The price determines which buyers and which sellers participate in the market. 
B)  Those buyers who value the good more than the price choose to buy the good. 
C)  Those sellers whose costs are less than the price choose to produce and sell the good. 
D)  Consumer surplus will be equal to producer surplus.

Question 11

The Surgeon General announces that eating apples promotes healthy teeth. As a result, the equilibrium price of apples

Accepted Answer

A)  increases, and producer surplus increases. 
B)  increases, and producer surplus decreases. 
C)  decreases, and producer surplus increases. 
D)  decreases, and producer surplus decreases. 
A)  increases, and producer surplus increases. 
B)  increases, and producer surplus decreases. 
C)  decreases, and producer surplus increases. 
D)  decreases, and producer surplus decreases.

Question 12

Economists normally assume people's preferences should be

Accepted Answer

A)  respected. 
B)  adjusted. 
C)  overruled. 
D)  ignored. 
A)  respected. 
B)  adjusted. 
C)  overruled. 
D)  ignored.

Question 13

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. If the market price of an orange is $0.65, then consumer surplus amounts to

Accepted Answer

A)  $3.90. 
B)  $6.75. 
C)  $3.60. 
D)  $7.50. 
A)  $3.90. 
B)  $6.75. 
C)  $3.60. 
D)  $7.50.

Question 14

Figure 7-33  
-Refer to Figure 7-33. How much is total surplus in this market at the equilibrium price?

Accepted Answer

Total surp

Question 15

Table 7-11
The following table represents the costs of five possible sellers.
  
-Refer to Table 7-11. If the market price is $1,100, the combined total cost of all participating sellers is

Accepted Answer

A)  $2,800. 
B)  $2,900. 
C)  $1,700. 
D)  $4,000. 
A)  $2,800. 
B)  $2,900. 
C)  $1,700. 
D)  $4,000.

Question 16

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

Accepted Answer

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

Question 17

Suppose your own demand curve for tomatoes slopes downward. Suppose also that, for the last tomato you bought this week, you paid a price exactly equal to your willingness to pay. Then

Accepted Answer

A)  you should buy more tomatoes before the end of the week. 
B)  you already have bought too many tomatoes this week. 
C)  your consumer surplus on the last tomato you bought is zero. 
D)  your consumer surplus on all of the tomatoes you have bought this week is zero. 
A)  you should buy more tomatoes before the end of the week. 
B)  you already have bought too many tomatoes this week. 
C)  your consumer surplus on the last tomato you bought is zero. 
D)  your consumer surplus on all of the tomatoes you have bought this week is zero.

Question 18

Figure 7-16  
-Refer to Figure 7-16. Sellers will be unwilling to sell more than

Accepted Answer

A)  1 unit of the good if its price is below $200. 
B)  2 units of the good if its price is below $450. 
C)  3 units of the good if its price is below $700. 
D)  All of the above are correct. 
A)  1 unit of the good if its price is below $200. 
B)  2 units of the good if its price is below $450. 
C)  3 units of the good if its price is below $700. 
D)  All of the above are correct.

Question 19

Figure 7-34  
-Refer to Figure 7-34. Suppose there is initially a price ceiling set at $4 in this market. How much is total producer surplus with the price ceiling in place?

Accepted Answer

Total producer surpl

Question 20

Figure 7-15  
-Refer to Figure 7-15. When the price falls from P2 to P1, which of the following would not be true?

Accepted Answer

A)  The sellers who still sell the good are worse off because they now receive less. 
B)  Some sellers leave the market because they are not willing to sell the good at the lower price. 
C)  The total cost of what is now sold by sellers is actually higher than it was before the decrease in the price. 
D)  Producer surplus would fall by area A + B. 
A)  The sellers who still sell the good are worse off because they now receive less. 
B)  Some sellers leave the market because they are not willing to sell the good at the lower price. 
C)  The total cost of what is now sold by sellers is actually higher than it was before the decrease in the price. 
D)  Producer surplus would fall by area A + B.

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

Consumer surplus can be measured as the area between the demand curve and the equilibrium price.

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

Figure 7-14 -Refer to Figure 7-14. If the government imposes a price ceiling of $50 in this market, then the new producer surplus will be

According to many economists, government restrictions on ticket scalping do all of the following except

Total surplus is

Figure 7-24 -Refer to Figure 7-24. If the government imposes a price ceiling at $12, then producer surplus is

Figure 7-15 -Refer to Figure 7-15. When the price is P1, producer surplus is

Table 7-13 The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality. -Refer to Table 7-13. The equilibrium market price for 10 piano lessons is $400. What is the total producer surplus in the market?

Which of the following statements is not correct about a market in equilibrium?

The Surgeon General announces that eating apples promotes healthy teeth. As a result, the equilibrium price of apples

Economists normally assume people's preferences should be

Figure 7-33 -Refer to Figure 7-33. How much is total surplus in this market at the equilibrium price?

Table 7-11 The following table represents the costs of five possible sellers. -Refer to Table 7-11. If the market price is $1,100, the combined total cost of all participating sellers is

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

Suppose your own demand curve for tomatoes slopes downward. Suppose also that, for the last tomato you bought this week, you paid a price exactly equal to your willingness to pay. Then

Figure 7-16 -Refer to Figure 7-16. Sellers will be unwilling to sell more than

Figure 7-34 -Refer to Figure 7-34. Suppose there is initially a price ceiling set at $4 in this market. How much is total producer surplus with the price ceiling in place?

Figure 7-15 -Refer to Figure 7-15. When the price falls from P2 to P1, which of the following would not be true?

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 Costs of Production

Firms in Competitive Markets

Monopoly

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

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