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

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Question 31

Multiple Choice

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Table 7-4 The numbers in Table 7-1 reveal the maximum willingness to pay for a ticket to a Chicago Cubs vs. St. Louis Cardinal's baseball game at Wrigley Field. -Refer to Table 7-4. If tickets sell for $25 each, then what is the total consumer surplus in the market?

A) $25
B) $35
C) $60
D) $110

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Question 32

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Inefficiency can be caused in a market by the presence of

A) market power.
B) externalities.
C) imperfectly competitive markets.
D) All of the above are correct.

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Question 33

Multiple Choice

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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?

Dawn's bridal boutique is having a sale on evening dresses. The increase in consumer surplus comes from the benefit of the lower prices to

Figure 7-15 -Refer to Figure 7-15. When the price rises from P1 to P2, which area represents the increase in producer surplus to existing producers?

Which of the following is not true when the price of a good or service falls?

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, consumer surplus will be

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

Figure 7-10 -Refer to Figure 7-10. Which area represents producer surplus when the price is P1?

An increase in price increases consumer surplus.

Table 7-1 -Refer to Table 7-1. If the price of the product is $122, then the total consumer surplus is

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?

If Martin sells a shirt for $40, and his producer surplus from the sale is $8, his cost must have been

The cost of production plus producer surplus is the price a seller is paid.

Table 7-18 The following table shows the willingness to pay for a good for the only four consumers in a market. -Refer to Table 7-18. If the price of the good is $20, how much is the total consumer surplus?

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

Producer surplus is

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

Table 7-2 This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. -Refer to Table 7-2. If the price of Vanilla Coke is $6.90, who will purchase the good?

Consumer surplus