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

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Question 81

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Figure 7-13 ​ -Refer to Figure 7-13. How much is total producer surplus in this market at the equilibrium price?

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Question 82

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A simultaneous increase in both the demand for tablets and the supply of tablets would imply that

A) both the value of tablets to consumers and the cost of producing tablets has increased.
B) both the value of tablets to consumers and the cost of producing tablets has decreased.
C) the value of tablets to consumers has decreased, and the cost of producing tablets has increased.
D) the value of tablets to consumers has increased, and the cost of producing tablets has decreased.

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Question 83

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Table 7-7 ​ ​ $\begin{array} { | c | c | } \hline \text { Seller } & \begin{array} { c } \text { Cost } \\\text { (Dollars) }\end{array} \\\hline \text { Mike } & 1,600 \\\hline \text { Laura } & 1,300 \\\hline \text { Alex } & 1,200 \\\hline \text { David } & 900 \\\hline \text { Codi } & 700 \\\hline\end{array}$ ​ -Refer to Table 7-7. If the market price is $1,000, the producer surplus in the market is

Producer surplus measures the

Refer to Scenario 7-2. Suppose a reduction in input prices shifts the market supply curve to $Q ^ { S } = P$ By how much does total producer surplus increase as a result of this supply shift?

Economists argue that restrictions against ticket scalping actually drive up the cost of many tickets.

Billie Jo values a stainless steel dishwasher for her new house at $500, but she succeeds in buying one for $425. Billie Jo's willingness to pay for the dishwasher is

Figure 7-14 ​ -Refer to Figure 7-14. Suppose there is initially a price floor set at $10 in this market. If the government removed the price floor, by how much would total consumer surplus increase?

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

If Rosa is willing to pay $450 for hockey tickets and has consumer surplus of $175, the price of the tickets is $625.

Figure 7-2 -Refer to Figure 7-2. At the equilibrium price, consumer surplus is

Figure 7-10 ​ -Refer to Figure 7-10. 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?

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.

Table 7-4 For each of the three potential buyers of apples, the table displays the willingness to pay for Bob, Sasha, and Eric, who are the only three buyers of apples. Assume that only three apples can be supplied per day. ​ ​ $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text {Willingness to Pay}$ $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text {(Dollars) }$ $\begin{array}{|c|c|c|c|} \hline& \text { First Apple } & \text { Second Apple } & \text { Third Apple } \\\hline \text { Bob } & 2.00 & 1.50 & 0.75 \\\hline \text { Sasha } & 1.50 & 1.00 & 0.60 \\\hline \text { Eric } & 0.75 & 0.25 & 0.00 \\\hline\end{array}$ -Refer to Table 7-4. Who experiences the largest gain in consumer surplus when the price of an apple decreases from $1.05 to $0.75?

The area below the demand curve and above the supply curve measures the producer surplus in a market.

Table 7-11 ​ ​ $\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Price } \\\text { (Dollars per unit) }\end{array} & \begin{array} { c } \text { Quantity Demanded } \\\text { (Units) }\end{array} & \begin{array} { c } \text { Quantity Supplied } \\\text { (Units) }\end{array} \\\hline 12.00 & 0 & 36 \\\hline 10.00 & 3 & 30 \\\hline 8.00 & 6 & 24 \\\hline 6.00 & 9 & 18 \\\hline 4.00 & 12 & 12 \\\hline 2.00 & 15 & 6 \\\hline 0.00 & 18 & 0 \\\hline\end{array}$ ​ -Refer to Table 7-11. Both the demand curve and the supply curve are straight lines. At equilibrium, total surplus is

Figure 7-6 -Refer to Figure 7-6. When the price falls from P₂ to P₁, producer surplus

Let P represent price; let QS represent quantity supplied; and assume the equation of the supply curve is P = 15 + (1/3) Q^S . If 90 units of the good are produced and sold, then producer surplus amounts to $1,350.

Figure 7-13 ​ -Refer to Figure 7-13. Suppose demand shifts such that consumers wish to purchase 12 fewer units at every price. How much is total surplus in this market at the new equilibrium price?

Figure 7-13 ​ -Refer to Figure 7-13. Suppose demand shifts such that consumers wish to purchase 12 fewer units at every price. How much is total consumer surplus in this market at the new equilibrium price?