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

Table 7-12 The only four producers in a market have the following costs: -Refer to Table 7-12. If the sellers bid against each other for the right to sell the good to a consumer, then the producer surplus will be

Table 7-11 The following table represents the costs of five possible sellers. -Refer to Table 7-11. Suppose each of the five sellers can supply at most one unit of the good. The market quantity supplied is exactly 2 if the price is

Efficiency is attained when

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

The distinction between efficiency and equality can be described as follows:

Table 7-17 -Refer to Table 7-17. Both the demand curve and the supply curve are straight lines. If the price is $4 but only 6 units are bought and sold, producer surplus will be

Figure 7-10 -Refer to Figure 7-10. Which area represents the increase in producer surplus when the price rises from P1 to P2?

If the price of oak lumber increases, what happens to consumer surplus in the market for oak cabinets?

Table 7-7 -Refer to Table 7-7. You have an extra ticket to the Midwest Regional Sweet 16 game in the men's NCAA basketball tournament. The table shows the willingness to pay of the four potential buyers in the market for a ticket to the game. You hold an auction to sell the ticket. Who makes the winning bid, and what does he offer to pay for the ticket?

Suppose the market demand curve for a good passes through the point quantity demanded = 100, price = $25). If there are five buyers in the market, then

If John's willingness to pay for a good is $20 and the price of the good is $15, how much is John's consumer surplus from purchasing the good?

Table 7-14 The only four producers in a market have the following costs: -Refer to Table 7-14. If the sellers bid against each other for the right to sell the good to a single consumer, then the good will sell for

When there is a technological advance in the pork industry, consumer surplus in that market will

A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it

George produces cupcakes. His production cost is $10 per dozen. He sells the cupcakes for $16 per dozen. His producer surplus per dozen cupcakes is

Answer each of the following questions about supply and producer surplus. a. What is producer surplus, and how is it measured? b. What is the relationship between the cost to sellers and the supply curve? c. Other things equal, what happens to producer surplus when the price of a good rises? Illustrate your answer on a supply curve.

Figure 7-27 -Refer to Figure 7-27. Buyers who value this good less than the equilibrium price are represented by which line segment?

The particular price that results in quantity supplied being equal to quantity demanded is the best price because it

Figure 7-22 -Refer to Figure 7-22. If the price decreases from $80 to $70 due to a shift in the supply curve, consumer surplus increases by

Figure 7-22 -Refer to Figure 7-22. At the equilibrium price, total surplus is