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

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Question 21

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At the equilibrium price of a good, the good will be purchased by those buyers who

A) value the good more than price.
B) value the good less than price.
C) have the money to buy the good.
D) consider the good a necessity.

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Question 22

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Total surplus = Value to buyers - Costs to sellers.

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Question 23

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Which of the following will cause an increase in consumer surplus?

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 Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day. -Refer to Table 7-5. If the market price of an orange is $0.65, then consumer surplus amounts to

Figure 7-10 -Refer to Figure 7-10. Which area represents producer surplus when the price is P2?

Table 7-19 The following table shows the cost of producing a good for the only four producers in a market. -Refer to Table 7-19. If the market price is $28, which producers will supply units in the market?

Figure 7-27 -Refer to Figure 7-27. Buyers who value this good less than the equilibrium price are represented by which line segment?

At Nick's Bakery, the cost to make homemade chocolate cake is $4 per cake. As a result of selling five cakes, Nick experiences a producer surplus in the amount of $17.50. Nick must be selling his cakes for

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?

Figure 7-8 -Refer to Figure 7-8. If the government imposes a price floor of $100 in this market, then consumer surplus will decrease by

Figure 7-3 -Refer to Figure 7-3. When the price rises from P1 to P2, consumer surplus

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

Figure 7-9 -Refer to Figure 7-9. If the price of the good is $14, then producer surplus is

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 first day is

Which of the following equations is not valid?

Justin builds fences for a living. Justin's out­of­pocket expenses (for wood, paint, etc.) plus the value that he places

The "invisible hand" is

When markets fail, public policy can

If John's willingness to pay for a good is $20 and the price of the good is $15, how much is John's consumer surplus from purchasing the good?

Brock is willing to pay $400 for a new suit, but he is able to buy the suit for $250. His consumer surplus is