Question 1

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.E) C) and D)
F) All of the above

Question 2

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.E) All of the above
F) A) and C)

Question 3

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.E) A) and B)
F) A) and C)

Question 4

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.
.

b. At a price of $0.20, Tammy wou...

Question 5

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 6

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 7

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.E) A) and D)
F) None of the above

Question 8

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.E) A) and B)
F) All of the above

Question 9

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 10

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.E) A) and B)
F) C) and D)

Question 11

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)   $15,000E) A) and C)
F) C) and D)

Question 12

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)   $199E) A) and B)
F) B) and D)

Question 13

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.E) B) and D)
F) B) and C)

Question 14

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.E) B) and C)
F) A) and D)

Question 15

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.E) A) and B)
F) A) and C)

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

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.E) A) and D)
F) B) and D)

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.E) None of the above
F) C) and D)

Question 19

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 20

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.E) A) and D)
F) A) and C)

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

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

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

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

Correct Answer
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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

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

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

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

Correct Answer
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a.
.
b. At a price of $0.20, Tammy wou...
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If the government allowed a free market in organs for transplant there would be

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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?

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Total producer surpl...
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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

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

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

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

Correct Answer
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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

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

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

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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?

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The consumers initially in the...
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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

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

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

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

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

Correct AnswerverifiedShow Answer

Correct Answerverifieda.. b. At a price of $0.20, Tammy wou...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedTotal producer surpl...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedThe consumers initially in the...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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a.
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b. At a price of $0.20, Tammy wou...
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Total producer surpl...
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The consumers initially in the...
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