Question 1

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 2

Let P represent price; let QS represent quantity supplied; and assume the equation of the supply curve is
   If 90 units of the good are produced and sold, then producer surplus amounts to $1,350.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A)  decreases. 
B)  is unchanged. 
C)  increases. 
D)  may increase, decrease, or remain unchanged. 
A)  decreases. 
B)  is unchanged. 
C)  increases. 
D)  may increase, decrease, or remain unchanged.

Question 4

Figure 7-15  
-Refer to Figure 7-15. When the price is P2, producer surplus is

Accepted Answer

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

Question 5

Table 7-11
The following table represents the costs of five possible sellers.
-Refer to Table 7-11. If the market price is $1,200, the producer surplus in the market is

Accepted Answer

A)  $100. 
B)  $800. 
C)  $400. 
D)  $500. 
A)  $100. 
B)  $800. 
C)  $400. 
D)  $500.

Question 6

Figure 7-30  
-Refer to Figure 7-30. If the market equilibrium price falls from $120 to $80, how much is the increase in consumer surplus to the consumers who were initially in the market at the $120 price?

Accepted Answer

Consumer surplus inc

Question 7

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

Accepted Answer

A)  $18. 
B)  $36. 
C)  $54. 
D)  $72. 
A)  $18. 
B)  $36. 
C)  $54. 
D)  $72.

Question 8

Suppose you sell a kayak for $600, but you were willing to sell it for $450. The buyer was willing to pay $650. The total surplus is $200.

Accepted Answer

A) True 
 B)False

Question 9

Table 7-15
  
-Refer to Table 7-15. You and your best friend want to hire a professional photographer to take pictures of your two families. The table shows the costs of the four potential sellers in the local photography market. You and your friend take bids from the sellers. Who offers the two winning bids, and what do they offer to charge for the photography sessions?

Accepted Answer

A)  LeBron and Kobe; more than $450 but less than $600 
B)  Kevin and Steve; more than $450 but less than $600 
C)  LeBron and Kobe; more than $700 
D)  Kevin and Steve; less than $400 
A)  LeBron and Kobe; more than $450 but less than $600 
B)  Kevin and Steve; more than $450 but less than $600 
C)  LeBron and Kobe; more than $700 
D)  Kevin and Steve; less than $400

Question 10

Suppose Brent, Callie, and Danielle each purchase a particular type of electric pencil sharpener at a price of $20. Brent's willingness to pay was $22, Callie's willingness to pay was $25, and Danielle's willingness to pay was $30.
Which of the following statements is correct?

Accepted Answer

A)  Had the price of the pencil sharpener been $24 rather than $20, only Danielle would have been a buyer. 
B)  Brent's consumer surplus is the smallest of the three individual consumer surpluses. 
C)  For the three individuals together, consumer surplus amounts to $60. 
D)  The fact that all three individuals paid $20 for the same type of pencil sharpener indicates that each one placed the same value on that pencil sharpener. 
A)  Had the price of the pencil sharpener been $24 rather than $20, only Danielle would have been a buyer. 
B)  Brent's consumer surplus is the smallest of the three individual consumer surpluses. 
C)  For the three individuals together, consumer surplus amounts to $60. 
D)  The fact that all three individuals paid $20 for the same type of pencil sharpener indicates that each one placed the same value on that pencil sharpener.

Question 11

Figure 7-21  
-Refer to Figure 7-21. Which area represents producer 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 12

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

Accepted Answer

A)  $30 or slightly more. 
B)  $40 or slightly less. 
C)  $55 or slightly less. 
D)  $65 or slightly less. 
A)  $30 or slightly more. 
B)  $40 or slightly less. 
C)  $55 or slightly less. 
D)  $65 or slightly less.

Question 13

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 the price is $20, then consumer surplus in the market is

Accepted Answer

A)  $20, and Wilbur and Ming-la purchase the good. 
B)  $45, and Carlos and Quilana purchase the good. 
C)  $45, and Quilana, Wilbur, and Ming-la purchase the good. 
D)  $55, and Carlos, Wilbur, and Ming-la purchase the good. 
A)  $20, and Wilbur and Ming-la purchase the good. 
B)  $45, and Carlos and Quilana purchase the good. 
C)  $45, and Quilana, Wilbur, and Ming-la purchase the good. 
D)  $55, and Carlos, Wilbur, and Ming-la purchase the good.

Question 14

Scenario 7-2
Suppose market demand and market supply are given by the equations:  
-Refer to Scenario 7-2. How much is total consumer surplus at the equilibrium price in this market?

Accepted Answer

Total consumer surpl

Question 15

Table 7-16
The following table represents the costs of five possible sellers.
Seller Cost $)
  
-Refer to Table 7-16. Suppose each of the five sellers can supply at most one unit of the good. At which of the following prices would the market quantity supplied be exactly three units?

Accepted Answer

A)  $20 
B)  $50 
C)  $90 
D)  $120 
A)  $20 
B)  $50 
C)  $90 
D)  $120

Question 16

Table 7-15
  
-Refer to Table 7-15. You want to hire a professional photographer to take pictures of your family. The table shows the costs of the four potential sellers in the local photography market. You hire Kevin for a price of $500. What is his producer surplus?

Accepted Answer

The answer of Table 7-15
  
-Refer to Table 7-15....

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

Alex is willing to pay $10, and Bella is willing to pay $8, for 1 pound of ribeye steak. When the price of ribeye steak increases from $9 to $11,

Accepted Answer

A)  Alex experiences a decrease in consumer surplus, but Bella does not. 
B)  Bella experiences a decrease in consumer surplus, but Alex does not. 
C)  both Bella and Alex experience a decrease in consumer surplus. 
D)  neither Bella nor Alex experiences a decrease in consumer surplus. 
A)  Alex experiences a decrease in consumer surplus, but Bella does not. 
B)  Bella experiences a decrease in consumer surplus, but Alex does not. 
C)  both Bella and Alex experience a decrease in consumer surplus. 
D)  neither Bella nor Alex experiences a decrease in consumer surplus.

Question 19

Scenario 7-2
Suppose market demand and market supply are given by the equations:  
-Refer to Scenario 7-2. How much is total surplus at the equilibrium price in this market?

Accepted Answer

Total surp

Question 20

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

Accepted Answer

A)  $16. 
B)  $18. 
C)  $24. 
D)  $26. 
A)  $16. 
B)  $18. 
C)  $24. 
D)  $26.

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

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

Let P represent price; let QS represent quantity supplied; and assume the equation of the supply curve is If 90 units of the good are produced and sold, then producer surplus amounts to $1,350.

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

Figure 7-15 -Refer to Figure 7-15. When the price is P2, producer surplus is

Table 7-11 The following table represents the costs of five possible sellers. -Refer to Table 7-11. If the market price is $1,200, the producer surplus in the market is

Figure 7-30 -Refer to Figure 7-30. If the market equilibrium price falls from $120 to $80, how much is the increase in consumer surplus to the consumers who were initially in the market at the $120 price?

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

Suppose you sell a kayak for $600, but you were willing to sell it for $450. The buyer was willing to pay $650. The total surplus is $200.

Suppose Brent, Callie, and Danielle each purchase a particular type of electric pencil sharpener at a price of $20. Brent's willingness to pay was $22, Callie's willingness to pay was $25, and Danielle's willingness to pay was $30. Which of the following statements is correct?

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

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

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 the price is $20, then consumer surplus in the market is

Scenario 7-2 Suppose market demand and market supply are given by the equations: -Refer to Scenario 7-2. How much is total consumer surplus at the equilibrium price in this market?

Table 7-16 The following table represents the costs of five possible sellers. Seller Cost $) -Refer to Table 7-16. Suppose each of the five sellers can supply at most one unit of the good. At which of the following prices would the market quantity supplied be exactly three units?

Table 7-15 -Refer to Table 7-15. You want to hire a professional photographer to take pictures of your family. The table shows the costs of the four potential sellers in the local photography market. You hire Kevin for a price of $500. What is his producer surplus?

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

Alex is willing to pay $10, and Bella is willing to pay $8, for 1 pound of ribeye steak. When the price of ribeye steak increases from $9 to $11,

Scenario 7-2 Suppose market demand and market supply are given by the equations: -Refer to Scenario 7-2. How much is total surplus at the equilibrium price in this market?

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

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

Filters