Question 1

Figure 7-14  
-Refer to Figure 7-14. At the equilibrium price, producer surplus is

Accepted Answer

A)  $800. 
B)  $400. 
C)  $450. 
D)  $900. 
A)  $800. 
B)  $400. 
C)  $450. 
D)  $900.

Question 2

At any quantity, the price given by the supply curve shows the cost of the lowest-cost seller.

Accepted Answer

A) True 
 B)False

Question 3

If producing a soccer ball costs Jake $5, and he sells it for $40, his producer surplus is $45.

Accepted Answer

A) True 
 B)False

Question 4

Figure 7-12  
-Refer to Figure 7-12. If the equilibrium price is $200, what is the producer surplus?

Accepted Answer

A)  $7,500 
B)  $3,750 
C)  $10,000 
D)  $15,000 
A)  $7,500 
B)  $3,750 
C)  $10,000 
D)  $15,000

Question 5

Tammy loves donuts. The table shown reflects the value Tammy places on each donut she eats:
   
a. Use this information to construct Tammy's demand curve for donuts.
b. If the price of donuts is $0.20, how many donuts will Tammy buy?
c. Show Tammy's consumer surplus on your graph. How much consumer surplus would she have at a price of $0.20?
d. If the price of donuts rose to $0.40, how many donuts would she purchase now? What would happen to Tammy's consumer surplus? Show this change on your graph.

Accepted Answer

a.
.
 @#IMG-DLM& b. At a price of $0.20, Tammy wou

Question 6

If producing a soccer ball costs Jake $5, and he sells it for $40, his producer surplus is $35.

Accepted Answer

A) True 
 B)False

Question 7

Table 7-3
The only four consumers in a market have the following willingness to pay for a good:
  
-Refer to Table 7-3. If there is only one unit of the good and if the buyers bid against each other for the right to purchase it, then the good will sell for

Accepted Answer

A)  $15 or slightly less. 
B)  $25 or slightly more. 
C)  $35 or slightly more. 
D)  $45 or slightly less. 
A)  $15 or slightly less. 
B)  $25 or slightly more. 
C)  $35 or slightly more. 
D)  $45 or slightly less.

Question 8

Scenario 7-1
Suppose market demand is given by the equation  
-Refer to Scenario 7-1. If the market equilibrium price falls from $10 to $5, how much additional consumer surplus do consumers initially in the market at the $10 price receive?

Accepted Answer

The consumers initially in the

Question 9

Figure 7-23  
-Refer to Figure 7-23. At equilibrium, producer surplus is 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 7-16  
-Refer to Figure 7-16. If the price of the good is $600, then producer surplus amounts to

Accepted Answer

A)  $650. 
B)  $800. 
C)  $900. 
D)  $1,000. 
A)  $650. 
B)  $800. 
C)  $900. 
D)  $1,000.

Question 11

Figure 7-24  
-Refer to Figure 7-24. At equilibrium, total surplus is measured by the area

Accepted Answer

A)  ABD. 
B)  ABF. 
C)  FBD. 
D)  HGCI. 
A)  ABD. 
B)  ABF. 
C)  FBD. 
D)  HGCI.

Question 12

Table 7-9
During the last two days, Chad purchased a latte from two different stores. The table below shows Chad's willingness to pay on each day and his consumer surplus from each purchase.
  
-Refer to Table 7-9. The price that Chad paid for a latte on the second day is

Accepted Answer

A)  $0.25 less than the amount he paid on the first day. 
B)  $1.00 less than the amount he paid on the first day. 
C)  $1.50 less than the amount he paid on the first day. 
D)  $0.50 less than the amount he paid on the first day. 
A)  $0.25 less than the amount he paid on the first day. 
B)  $1.00 less than the amount he paid on the first day. 
C)  $1.50 less than the amount he paid on the first day. 
D)  $0.50 less than the amount he paid on the first day.

Question 13

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 14

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 15

Table 7-13
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
  
-Refer to Table 7-13. You wish to purchase 10 piano lessons, so you take bids from each of the sellers. You will not accept a bid below a seller's cost because you are concerned that the seller will not provide all 10 lessons. What bid will you accept?

Accepted Answer

A)  $351 
B)  $251 
C)  $249 
D)  $199 
A)  $351 
B)  $251 
C)  $249 
D)  $199

Question 16

Figure 7-33  
-Refer to Figure 7-33. Suppose demand shifts such that consumers wish to purchase 12 fewer units at every price.
How much is total producer surplus in this market at the new equilibrium price?

Accepted Answer

Total producer surpl

Question 17

Figure 7-19  
-Refer to Figure 7-19. If the government imposes a price floor of $55 in this market, then total surplus will be

Accepted Answer

A)  $137.50. 
B)  $125.00. 
C)  $187.50. 
D)  $275.00. 
A)  $137.50. 
B)  $125.00. 
C)  $187.50. 
D)  $275.00.

Question 18

If the government allowed a free market in organs for transplant there would be

Accepted Answer

A)  a decrease in the shortage of organs for transplant. 
B)  a decrease in producer surplus. 
C)  an decrease in consumer surplus 
D)  an increase in the waiting period for transplant organs. 
A)  a decrease in the shortage of organs for transplant. 
B)  a decrease in producer surplus. 
C)  an decrease in consumer surplus 
D)  an increase in the waiting period for transplant organs.

Question 19

Figure 7-24  
-Refer to Figure 7-24. If 4 units of the good are produced and sold, then

Accepted Answer

A)  producer surplus is greater than consumer surplus. 
B)  consumer surplus is $16. 
C)  total surplus is minimized. 
D)  total surplus is not maximized. 
A)  producer surplus is greater than consumer surplus. 
B)  consumer surplus is $16. 
C)  total surplus is minimized. 
D)  total surplus is not maximized.

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 would be

Accepted Answer

A)  $2,500. 
B)  $900. 
C)  $800. 
D)  $1,600. 
A)  $2,500. 
B)  $900. 
C)  $800. 
D)  $1,600.

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

Figure 7-14 -Refer to Figure 7-14. At the equilibrium price, producer surplus is

At any quantity, the price given by the supply curve shows the cost of the lowest-cost seller.

If producing a soccer ball costs Jake $5, and he sells it for $40, his producer surplus is $45.

Figure 7-12 -Refer to Figure 7-12. If the equilibrium price is $200, what is the producer surplus?

If producing a soccer ball costs Jake $5, and he sells it for $40, his producer surplus is $35.

Table 7-3 The only four consumers in a market have the following willingness to pay for a good: -Refer to Table 7-3. If there is only one unit of the good and if the buyers bid against each other for the right to purchase it, then the good will sell for

Scenario 7-1 Suppose market demand is given by the equation -Refer to Scenario 7-1. If the market equilibrium price falls from $10 to $5, how much additional consumer surplus do consumers initially in the market at the $10 price receive?

Figure 7-23 -Refer to Figure 7-23. At equilibrium, producer surplus is represented by the area

Figure 7-16 -Refer to Figure 7-16. If the price of the good is $600, then producer surplus amounts to

Figure 7-24 -Refer to Figure 7-24. At equilibrium, total surplus is measured by the area

Table 7-9 During the last two days, Chad purchased a latte from two different stores. The table below shows Chad's willingness to pay on each day and his consumer surplus from each purchase. -Refer to Table 7-9. The price that Chad paid for a latte on the second day is

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

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

Figure 7-33 -Refer to Figure 7-33. Suppose demand shifts such that consumers wish to purchase 12 fewer units at every price. How much is total producer surplus in this market at the new equilibrium price?

Figure 7-19 -Refer to Figure 7-19. If the government imposes a price floor of $55 in this market, then total surplus will be

If the government allowed a free market in organs for transplant there would be

Figure 7-24 -Refer to Figure 7-24. If 4 units of the good are produced and sold, then

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 would be

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

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

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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