Question 1

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

Accepted Answer

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

Question 2

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

Accepted Answer

A)   A
B)   B
C)   A+B
D)   GE) A) and B)
F) A) and C)

Question 3

When markets fail, public policy can

Accepted Answer

A)   do nothing to improve the situation.
B)   potentially remedy the problem and increase economic efficiency.
C)   always remedy the problem and increase economic efficiency.
D)   in theory, remedy the problem, but in practice, public policy has proven to be ineffective.E) B) and C)
F) All of the above

Question 4

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?

Accepted Answer

Total cons...

Question 5

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) B) and C)
F) C) and D)

Question 6

If the demand for leather decreases, producer surplus in the leather market

Accepted Answer

A)   increases.
B)   decreases.
C)   remains the same.
D)   may increase, decrease, or remain the same.E) C) and D)
F) B) and D)

Question 7

Figure 7-16 
-Refer to Figure 7-16. Suppose the price of the good is $450. Then, on the first unit of the good that is sold, producer surplus is

Accepted Answer

A)   $250, and on the second unit of the good that is sold, producer surplus is $100.
B)   $250, and on the second unit of the good that is sold, producer surplus is $150.
C)   $350, and on the second unit of the good that is sold, producer surplus is $100.
D)   $350, and on the second unit of the good that is sold, producer surplus is $150.E) None of the above
F) B) and C)

Question 8

Which tools allow economists to determine if the allocation of resources determined by free markets is desirable?

Accepted Answer

A)   profits and costs to firms
B)   consumer and producer surplus
C)   the equilibrium price and quantity
D)   incomes of and prices paid by buyersE) B) and D)
F) All of the above

Question 9

Figure 7-18 
-Refer to Figure 7-18. Suppose the willingness to pay of the marginal buyer of the 3rd unit is $125. Then total surplus is maximized if

Accepted Answer

A)   1 unit of the good is produced and sold.
B)   2 units of the good are produced and sold.
C)   3 units of the good are produced and sold.
D)   4 units of the good are produced and sold.E) B) and C)
F) None of the above

Question 10

Ticket scalping can increase total surplus in the market for tickets to sporting events.

Accepted Answer

A) True 
 B)False

Question 11

Table 7-7
 
-Refer to Table 7-7. You are selling 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. Which of the following graphs represents the market demand curve?

Accepted Answer

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

Question 12

Figure 7-27 
-Refer to Figure 7-27. Sellers whose costs are greater than the equilibrium price are represented by segment

Accepted Answer

A)   AC.
B)   CK.
C)   BC.
D)   CH.E) A) and D)
F) B) and D)

Question 13

Figure 7-1 
-Refer to Figure 7-1. The value of the good to consumers minus the cost of the good to consumers amounts to $325 if the price of the good is

Accepted Answer

A)   $200.
B)   $150.
C)   $125 .
D)   $100.E) C) and D)
F) B) and C)

Question 14

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

Accepted Answer

A)   AC.
B)   CK.
C)   BC.
D)   CH.E) C) and D)
F) B) and C)

Question 15

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 increases from $0.80 to $1.05, then consumer surplus

Accepted Answer

A)   increases by $0.75.
B)   decreases by $0.95.
C)   decreases by $0.75.
D)   decreases by $1.00.E) C) and D)
F) A) and C)

Question 16

Figure 7-3 
-Refer to Figure 7-3. Area C represents the

Accepted Answer

A)   decrease in consumer surplus that results from a downward-sloping demand curve.
B)   consumer surplus to new consumers who enter the market when the price falls from P2 to P1.
C)   increase in producer surplus when quantity sold increases from Q2 to Q1.
D)   decrease in consumer surplus to each consumer in the market when the price increases from P1 to P2.E) None of the above
F) B) and C)

Question 17

Table 7-20
 
-Refer to Table 7-20. How much is total consumer surplus at the equilibrium price in this market?

Accepted Answer

Total consumer surpl...

Question 18

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

Accepted Answer

A)   A
B)   B
C)   C
D)   DE) B) and C)
F) C) and D)

Question 19

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

Question 20

Table 7-6
For each of three potential buyers of apples, the table displays the willingness to pay for the first three apples of the day. Assume Xavier, Yadier, and Zavi are the only three buyers of apples, and only three apples can be supplied per day.
 
-Refer to Table 7-6. If the market price of an apple increases from $1.40 to $1.60, then consumer surplus

Accepted Answer

A)   decreases by $0.15.
B)   decreases by $0.30.
C)   decreases by $0.45.
D)   increases by $0.15.E) A) and C)
F) None of the above

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

Ticket scalping can increase total surplus in the market for tickets to sporting events.

Correct Answer
verified

Which tools allow economists to determine if the allocation of resources determined by free markets is desirable?

Correct Answer
verified

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

Correct Answer
verified

When markets fail, public policy can

Correct Answer
verified

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

Correct Answer
verified

Figure 7-3 -Refer to Figure 7-3. Area C represents the

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

If the demand for leather decreases, producer surplus in the leather market

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Figure 7-27 -Refer to Figure 7-27. Sellers whose costs are greater than the equilibrium price are represented by segment

Correct Answer
verified

Figure 7-18 -Refer to Figure 7-18. Suppose the willingness to pay of the marginal buyer of the 3rd unit is $125. Then total surplus is maximized if

Correct Answer
verified

Figure 7-1 -Refer to Figure 7-1. The value of the good to consumers minus the cost of the good to consumers amounts to $325 if the price of the good is

Correct Answer
verified

Figure 7-16 -Refer to Figure 7-16. Suppose the price of the good is $450. Then, on the first unit of the good that is sold, producer surplus is

Correct Answer
verified

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?

Correct Answer
verified
Total cons...
View Answer

Table 7-20 -Refer to Table 7-20. How much is total consumer surplus at the equilibrium price in this market?

Correct Answer
verified
Total consumer surpl...
View Answer

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

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

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

Ticket scalping can increase total surplus in the market for tickets to sporting events.

Correct AnswerverifiedShow Answer

Which tools allow economists to determine if the allocation of resources determined by free markets is desirable?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When markets fail, public policy can

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 7-3 -Refer to Figure 7-3. Area C represents the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the demand for leather decreases, producer surplus in the leather market

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 7-27 -Refer to Figure 7-27. Sellers whose costs are greater than the equilibrium price are represented by segment

Correct AnswerverifiedShow Answer

Figure 7-18 -Refer to Figure 7-18. Suppose the willingness to pay of the marginal buyer of the 3rd unit is $125. Then total surplus is maximized if

Correct AnswerverifiedShow Answer

Figure 7-1 -Refer to Figure 7-1. The value of the good to consumers minus the cost of the good to consumers amounts to $325 if the price of the good is

Correct AnswerverifiedShow Answer

Figure 7-16 -Refer to Figure 7-16. Suppose the price of the good is $450. Then, on the first unit of the good that is sold, producer surplus is

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedTotal cons...View AnswerShow Answer

Table 7-20 -Refer to Table 7-20. How much is total consumer surplus at the equilibrium price in this market?

Correct AnswerverifiedTotal consumer surpl...View AnswerShow Answer

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

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 Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Total cons...
View Answer

Correct Answer
verified
Total consumer surpl...
View Answer

Correct Answer
verified

Correct Answer
verified