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Principles of Macroeconomics Study Set 8
Exam 7: Consumers Producers and the Efficiency of Markets: Part B
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Question 21
True/False
Suppose you buy an iPod for $100.If your consumer surplus is $30,your willingness to pay is $70.
Question 22
True/False
If Darby values a soccer ball at $50,and she pays $40 for it,her consumer surplus is $10.
Question 23
True/False
In a competitive market,sales go to those producers who are willing to supply the product at the lowest price.
Question 24
True/False
All else equal,an increase in demand will always increase consumer surplus.
Question 25
True/False
If producing a soccer ball costs Jake $5,and he sells it for $40,his producer surplus is $45.
Question 26
True/False
Producing a soccer ball costs Jake $5.He sells it to Darby for $35.Darby values the soccer ball at $50.For this transaction,the total surplus in the market is $40.
Question 27
True/False
The willingness to pay is the maximum amount that a buyer will pay for a good and measures how much the buyer values the good.
Question 28
True/False
Economists generally believe that,although there may be advantages to society from ticket-scalping,the costs to society of this activity outweigh the benefits.
Question 29
True/False
Economists argue that restrictions against ticket scalping actually drive up the cost of many tickets.
Question 30
True/False
The lower the price,the lower the consumer surplus,all else equal.
Question 31
True/False
Let P represent price;let QS represent quantity supplied;and assume the equation of the supply curve is
.If 80 units of the good are produced and sold,then producer surplus amounts to $1,200.
Question 32
True/False
The equilibrium of supply and demand in a market maximizes the total benefits to buyers and sellers of participating in that market.
Question 33
True/False
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.
Question 34
True/False
In order to conclude that markets are efficient,we assume that they are perfectly competitive.
Question 35
True/False
Free markets allocate (a)the supply of goods to the buyers who value them most highly and (b)the demand for goods to the sellers who can produce them at least cost.
Question 36
True/False
The area below the price and above the supply curve measures the producer surplus in a market.
Question 37
True/False
When markets fail,public policy can potentially remedy the problem and increase economic efficiency.
Question 38
True/False
Connie can clean windows in large office buildings at a cost of $1 per window.The market price for window-cleaning services is $3 per window.If Connie cleans 100 windows,her producer surplus is $100.