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

Table 7-4 The numbers in Table 7-1 reveal the maximum willingness to pay for a ticket to a Chicago Cubs vs. St. Louis Cardinal's baseball game at Wrigley Field. -Refer to Table 7-4. If you have two essentially) identical tickets that you sell to the group in an auction, what will be the selling price for each ticket?

When the demand for a good increases and the supply of the good remains unchanged, consumer surplus

The French expression used by free-market advocates, which literally translates as "allow them to do," is

If a market is in equilibrium, then it is impossible for a social planner to raise economic welfare by increasing or decreasing the quantity of the good.

Table 7-11 The following table represents the costs of five possible sellers. -Refer to Table 7-11. If the market price is $1,400, the combined total cost of all participating sellers is

Suppose that Firms A and B each produce high-resolution computer monitors, but Firm A can do so at a lower cost. Cassie and David each want to purchase a high-resolution computer monitor, but David is willing to pay more than Cassie. If Firm B produces a monitor that David buys, then the market outcome illustrates which of the following principles? i) Free markets allocate the supply of goods to the buyers who value them most highly, as measured by their willingness to pay. Ii) Free markets allocate the demand for goods to the sellers who can produce them at the least cost.

On a graph, consumer surplus is represented by the area

Total surplus is equal to

Producer surplus is the amount a seller is paid minus the cost of production.

The current policy on kidney donation effectively sets a price ceiling of zero.

In a competitive market, sales go to those producers who are willing to supply the product at the lowest price.

Figure 7-11 -Refer to Figure 7-11. If the demand curve is D and the supply curve shifts from S' to S, what is the change in producer surplus?

The Surgeon General announces that eating chocolate increases tooth decay. As a result, the equilibrium price of chocolate

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

In a market, the marginal buyer is the buyer

Table 7-17 -Refer to Table 7-17. Both the demand curve and the supply curve are straight lines. If 6 units are bought and sold, then total surplus is

Efficiency refers to whether a market outcome is fair, while equality refers to whether the maximum amount of output was produced from a given number of inputs.

Figure 7-24 -Refer to Figure 7-24. The equilibrium allocation of resources is

Figure 7-15 -Refer to Figure 7-15. When the price rises from P1 to P2, which area represents the increase in producer surplus due to new producers entering the market?

Figure 7-18 -Refer to Figure 7-18. Total surplus amounts to $500 if consumer surplus amounts to