Question 1

Table 7-6
 
-Refer to Table 7-6.You have four essentially identical extra tickets to the Midwest Regional Sweet 16 game in the men's NCAA basketball tournament.The table shows the willingness to pay of the four potential buyers in the market for a ticket to the game.You offer to sell the tickets for $325.How many tickets do you sell,and what is the total consumer surplus in the market?

Accepted Answer

A)   one ticket; $175
B)   two tickets; $225
C)   three tickets; $225
D)   three tickets; $275

Question 2

Table 7-1
 
-Refer to Table 7-1.If the price of the product is $15,then who would be willing to purchase the product?

Accepted Answer

A)   Lori
B)   Lori and Audrey
C)   Lori, Audrey, and Zach
D)   Lori, Audrey, Zach, and Calvin

Question 3

Table 7-5
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day.
 
-Refer to Table 7-5.The market quantity of oranges demanded per day is exactly 5 if the price of an orange,P,satisfies

Accepted Answer

A)   $1.00 
B)   $0.80 
C)   $0.80 
D)   $0.75 < P < $0.80.

Question 4

If a consumer is willing and able to pay $20 for a particular good and if he pays $16 for the good,then for that consumer,consumer surplus amounts to

Accepted Answer

A)   $4.
B)   $16.
C)   $20.
D)   $36.

Question 5

Figure 7-20
 
-Refer to Figure 7-20.At equilibrium,consumer surplus is measured by the area

Accepted Answer

A)   ACG.
B)   AFG.
C)   KBG.
D)   CFG.

Question 6

Table 7-10
 
-Refer to Table 7-10.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

A)   $500
B)   $150
C)   $100
D)   $50

Question 7

Which of the following is correct?

Accepted Answer

A)   Efficiency deals with the size of the economic pie, and equality deals with how fairly the pie is sliced.
B)   Equality can be judged on positive grounds whereas efficiency requires normative judgments.
C)   Efficiency is more difficult to evaluate than equality.
D)   Equality and efficiency are both maximized in a society when total surplus is maximized.

Question 8

At Nick's Bakery,the cost to make homemade chocolate cake is $3 per cake.As a result of selling three cakes,Nick experiences a producer surplus in the amount of $19.50.Nick must be selling his cakes for

Accepted Answer

A)   $6.50 each.
B)   $7.50 each.
C)   $9.50 each.
D)   $10.50 each.

Question 9

Consumer surplus

Accepted Answer

A)   is the amount of a good that a consumer can buy at a price below equilibrium price.
B)   is the amount a consumer is willing to pay minus the amount the consumer actually pays.
C)   is the number of consumers who are excluded from a market because of scarcity.
D)   measures how much a seller values a good.

Question 10

Suppose consumer income increases.If grass seed is a normal good,the equilibrium price of grass seed will

Accepted Answer

A)   decrease, and producer surplus in the industry will decrease.
B)   increase, and producer surplus in the industry will increase.
C)   decrease, and producer surplus in the industry will increase.
D)   increase, and producer surplus in the industry will decrease.

Question 11

Jeff decides that he would pay as much as $3,000 for a new laptop computer.He buys the computer and realizes consumer surplus of $700.How much did Jeff pay for his computer?

Accepted Answer

A)   $700
B)   $2,300
C)   $3,000
D)   $3,700

Question 12

If the current allocation of resources in the market for hammers is inefficient,then it must be the case that

Accepted Answer

A)   producer surplus exceeds consumer surplus in the market for hammers.
B)   consumer surplus exceeds producer surplus in the market for hammers.
C)   the sum of consumer surplus and producer surplus could be increased by moving to a different allocation of resources.
D)   the costs that sellers of hammers are incurring could be reduced by moving to a different allocation of resources.

Question 13

Figure 7-11
 
-Refer to Figure 7-11.If the government imposes a price ceiling of $70 in this market,then the new producer surplus will be

Accepted Answer

A)   $50.
B)   $100.
C)   $175.
D)   $350.

Question 14

A seller's willingness to sell is

Accepted Answer

A)   measured by the seller's cost of production.
B)   related to her supply curve, just as a buyer's willingness to buy is related to his demand curve.
C)   less than the price received if producer surplus is a positive number.
D)   All of the above are correct.

Question 15

Figure 7-15
 
-Refer to Figure 7-15.At the equilibrium price,consumer surplus is

Accepted Answer

A)   $150.
B)   $200.
C)   $250.
D)   $350.

Question 16

If the price of oak lumber increases,what happens to consumer surplus in the market for oak cabinets?

Accepted Answer

A)   Consumer surplus increases.
B)   Consumer surplus decreases.
C)   Consumer surplus will not change consumer surplus; only producer surplus changes.
D)   Consumer surplus depends on what event led to the increase in the price of oak lumber.

Question 17

Figure 7-12
 
-Refer to Figure 7-12.When the price is P2,producer surplus is

Accepted Answer

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

Question 18

Consumer surplus can be measured as the area between the demand curve and the supply curve.

Accepted Answer

A) True 
 B)False

Question 19

If the cost of producing sofas decreases,then consumer surplus in the sofa market will

Accepted Answer

A)   increase.
B)   decrease.
C)   remain constant.
D)   increase for some buyers and decrease for other buyers.

Question 20

Suppose televisions are a normal good and buyers of televisions experience a decrease in income.As a result,consumer surplus in the television market

Accepted Answer

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

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

Table 7-1 -Refer to Table 7-1.If the price of the product is $15,then who would be willing to purchase the product?

Correct Answer
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Which of the following is correct?

Correct Answer
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If a consumer is willing and able to pay $20 for a particular good and if he pays $16 for the good,then for that consumer,consumer surplus amounts to

Correct Answer
verified

If the cost of producing sofas decreases,then consumer surplus in the sofa market will

Correct Answer
verified

If the price of oak lumber increases,what happens to consumer surplus in the market for oak cabinets?

Correct Answer
verified

Figure 7-12 -Refer to Figure 7-12.When the price is P2,producer surplus is

Correct Answer
verified

Suppose consumer income increases.If grass seed is a normal good,the equilibrium price of grass seed will

Correct Answer
verified

Table 7-10 -Refer to Table 7-10.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?

Correct Answer
verified

Consumer surplus can be measured as the area between the demand curve and the supply curve.

Correct Answer
verified

If the current allocation of resources in the market for hammers is inefficient,then it must be the case that

Correct Answer
verified

Correct Answer
verified

Suppose televisions are a normal good and buyers of televisions experience a decrease in income.As a result,consumer surplus in the television market

Correct Answer
verified

Figure 7-11 -Refer to Figure 7-11.If the government imposes a price ceiling of $70 in this market,then the new producer surplus will be

Correct Answer
verified

At Nick's Bakery,the cost to make homemade chocolate cake is $3 per cake.As a result of selling three cakes,Nick experiences a producer surplus in the amount of $19.50.Nick must be selling his cakes for

Correct Answer
verified

A seller's willingness to sell is

Correct Answer
verified

Figure 7-20 -Refer to Figure 7-20.At equilibrium,consumer surplus is measured by the area

Correct Answer
verified

Correct Answer
verified

Jeff decides that he would pay as much as $3,000 for a new laptop computer.He buys the computer and realizes consumer surplus of $700.How much did Jeff pay for his computer?

Correct Answer
verified

Consumer surplus

Correct Answer
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Figure 7-15 -Refer to Figure 7-15.At the equilibrium price,consumer surplus is

Correct Answer
verified

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

Table 7-1 -Refer to Table 7-1.If the price of the product is $15,then who would be willing to purchase the product?

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

If a consumer is willing and able to pay $20 for a particular good and if he pays $16 for the good,then for that consumer,consumer surplus amounts to

Correct AnswerverifiedShow Answer

If the cost of producing sofas decreases,then consumer surplus in the sofa market will

Correct AnswerverifiedShow Answer

If the price of oak lumber increases,what happens to consumer surplus in the market for oak cabinets?

Correct AnswerverifiedShow Answer

Figure 7-12 -Refer to Figure 7-12.When the price is P2,producer surplus is

Correct AnswerverifiedShow Answer

Suppose consumer income increases.If grass seed is a normal good,the equilibrium price of grass seed will

Correct AnswerverifiedShow Answer

Table 7-10 -Refer to Table 7-10.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?

Correct AnswerverifiedShow Answer

Consumer surplus can be measured as the area between the demand curve and the supply curve.

Correct AnswerverifiedShow Answer

If the current allocation of resources in the market for hammers is inefficient,then it must be the case that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose televisions are a normal good and buyers of televisions experience a decrease in income.As a result,consumer surplus in the television market

Correct AnswerverifiedShow Answer

Figure 7-11 -Refer to Figure 7-11.If the government imposes a price ceiling of $70 in this market,then the new producer surplus will be

Correct AnswerverifiedShow Answer

At Nick's Bakery,the cost to make homemade chocolate cake is $3 per cake.As a result of selling three cakes,Nick experiences a producer surplus in the amount of $19.50.Nick must be selling his cakes for

Correct AnswerverifiedShow Answer

A seller's willingness to sell is

Correct AnswerverifiedShow Answer

Figure 7-20 -Refer to Figure 7-20.At equilibrium,consumer surplus is measured by the area

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Jeff decides that he would pay as much as $3,000 for a new laptop computer.He buys the computer and realizes consumer surplus of $700.How much did Jeff pay for his computer?

Correct AnswerverifiedShow Answer

Consumer surplus

Correct AnswerverifiedShow Answer

Figure 7-15 -Refer to Figure 7-15.At the equilibrium price,consumer surplus is

Correct AnswerverifiedShow Answer

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