Question 1

Producer surplus directly measures

Accepted Answer

A)   the well-being of society as a whole.
B)   the well-being of buyers and sellers.
C)   the well-being of sellers.
D)   sellers' willingness to sell.E) B) and C)
F) A) and D)

Question 2

Table 7-8
The only four producers in a market have the following costs:
 
-Refer to Table 7-8.If the sellers bid against each other for the right to sell the good to a consumer,then the good will sell for

Accepted Answer

A)   $50 or slightly more.
B)   $100 or slightly less.
C)   $150 or slightly less.
D)   $200 or slightly more.E) None of the above
F) A) and B)

Question 3

Figure 7-13 
-Refer to Figure 7-13.If the price of the good is $600,then producer surplus amounts to

Accepted Answer

A)   $650.
B)   $800.
C)   $900.
D)   $1,000.E) A) and B)
F) None of the above

Question 4

Total surplus in a market will increase when the government

Accepted Answer

A)   imposes a tax on that market.
B)   imposes a binding price floor on that market.
C)   removes a binding price ceiling from that market.
D)   None of the above is correct.E) A) and D)
F) None of the above

Question 5

Which of the following will cause a decrease in producer surplus?

Accepted Answer

A)   the imposition of a binding price ceiling in the market
B)   an increase in the number of buyers of the good
C)   income increases and buyers consider the good to be normal
D)   the price of a complement decreasesE) B) and D)
F) B) and C)

Question 6

Figure 7-17 
-Refer to Figure 7-17.When the price is P1,area B represents

Accepted Answer

A)   total surplus.
B)   producer surplus.
C)   consumer surplus.
D)   profits.E) B) and D)
F) A) and D)

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Table 7-11
 
-Refer to Table 7-11.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

Accepted Answer

A)   $21.
B)   $28.
C)   $36.
D)   $42.E) B) and D)
F) B) and C)

Question 9

Welfare economics explains which of the following in the market for DVDs?

Accepted Answer

A)   The government sets the price of DVDs; firms respond to the price by producing a specific level of output.
B)   The government sets the quantity of DVDs; firms respond to the quantity by charging a specific price.
C)   The market equilibrium price for DVDs maximizes the total welfare to DVD buyers and sellers.
D)   The market equilibrium price for DVDs maximizes consumer welfare but minimizes producer welfare.E) A) and C)
F) A) and B)

Question 10

Tom tunes pianos in his spare time for extra income.Buyers of his service are willing to pay $155 per tuning.One particular week,Tom is willing to tune the first piano for $120,the second piano for $125,the third piano for $140,and the fourth piano for $160.Assume Tom is rational in deciding how many pianos to tune.His producer surplus is

Accepted Answer

A)   $95.
B)   $80.
C)   $75.
D)   $60.E) A) and B)
F) None of the above

Question 11

Table 7-7
The following table represents the costs of five possible sellers.
 
-Refer to Table 7-7.If the price is $775,who would be willing to supply the product?

Accepted Answer

A)   Abby and Bobby
B)   Abby,Bobby,and Carlos
C)   Carlos,Dianne,and Evalina
D)   Dianne and EvalinaE) A) and B)
F) A) and C)

Question 12

Inefficiency can be caused in a market by the presence of

Accepted Answer

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

Question 13

Which of the following statements is correct?

Accepted Answer

A)   Buyers always want to pay less and sellers always want to be paid more.
B)   Buyers always want to pay less and sellers always want to be paid less.
C)   Buyers always want to pay more and sellers always want to be paid more.
D)   Buyers always want to pay more and sellers always want to be paid less.E) C) and D)
F) A) and D)

Question 14

Bill created a new software program he is willing to sell for $300.He sells his first copy and enjoys a producer surplus of $250.What is the price paid for the software?

Accepted Answer

A)   $50.
B)   $250.
C)   $300.
D)   $550.E) None of the above
F) A) and C)

Question 15

A supply curve can be used to measure producer surplus because it reflects

Accepted Answer

A)   the actions of sellers.
B)   quantity supplied.
C)   sellers' costs.
D)   the amount that will be purchased by consumers in the market.E) C) and D)
F) B) and C)

Question 16

Sarah buys a new MP3 player for $135.She receives consumer surplus of $25 on her purchase if her willingness to pay is

Accepted Answer

A)   $25.
B)   $110.
C)   $135.
D)   $160.E) A) and C)
F) B) and C)

Question 17

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

Question 18

Table 7-3
The only four consumers in a market have the following willingness to pay for a good:
 
-Refer to Table 7-3.If the market price for the good is $20,who will purchase the good?

Accepted Answer

A)   Ming-la only
B)   Carlos and Quilana only
C)   Quilana and Wilbur only
D)   Quilana,Wilbur,and Ming-la onlyE) All of the above
F) A) and D)

Question 19

Table 7-9
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
 
-Refer to Table 7-9.The equilibrium market price for 10 piano lessons is $300.What is the total producer surplus in the market?

Accepted Answer

A)   $50
B)   $150
C)   $1,050
D)   $1,500E) All of the above
F) A) and D)

Question 20

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

Accepted Answer

A)   $150.
B)   $200.
C)   $250.
D)   $300.E) B) and D)
F) A) and B)

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

Which of the following is correct?

Correct Answer
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Table 7-3 The only four consumers in a market have the following willingness to pay for a good: -Refer to Table 7-3.If the market price for the good is $20,who will purchase the good?

Correct Answer
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Figure 7-13 -Refer to Figure 7-13.If the price of the good is $600,then producer surplus amounts to

Correct Answer
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Welfare economics explains which of the following in the market for DVDs?

Correct Answer
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Which of the following will cause a decrease in producer surplus?

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

Correct Answer
verified

Total surplus in a market will increase when the government

Correct Answer
verified

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

Correct Answer
verified

Table 7-8 The only four producers in a market have the following costs: -Refer to Table 7-8.If the sellers bid against each other for the right to sell the good to a consumer,then the good will sell for

Correct Answer
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Table 7-9 The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality. -Refer to Table 7-9.The equilibrium market price for 10 piano lessons is $300.What is the total producer surplus in the market?

Correct Answer
verified

A supply curve can be used to measure producer surplus because it reflects

Correct Answer
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Figure 7-17 -Refer to Figure 7-17.When the price is P1,area B represents

Correct Answer
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Table 7-7 The following table represents the costs of five possible sellers. -Refer to Table 7-7.If the price is $775,who would be willing to supply the product?

Correct Answer
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Producer surplus directly measures

Correct Answer
verified

Bill created a new software program he is willing to sell for $300.He sells his first copy and enjoys a producer surplus of $250.What is the price paid for the software?

Correct Answer
verified

Table 7-11 -Refer to Table 7-11.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

Correct Answer
verified

Sarah buys a new MP3 player for $135.She receives consumer surplus of $25 on her purchase if her willingness to pay is

Correct Answer
verified

Inefficiency can be caused in a market by the presence of

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

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

Which of the following is correct?

Correct AnswerverifiedShow Answer

Table 7-3 The only four consumers in a market have the following willingness to pay for a good: -Refer to Table 7-3.If the market price for the good is $20,who will purchase the good?

Correct AnswerverifiedShow Answer

Figure 7-13 -Refer to Figure 7-13.If the price of the good is $600,then producer surplus amounts to

Correct AnswerverifiedShow Answer

Welfare economics explains which of the following in the market for DVDs?

Correct AnswerverifiedShow Answer

Which of the following will cause a decrease in producer surplus?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Total surplus in a market will increase when the government

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 7-8 The only four producers in a market have the following costs: -Refer to Table 7-8.If the sellers bid against each other for the right to sell the good to a consumer,then the good will sell for

Correct AnswerverifiedShow Answer

Table 7-9 The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality. -Refer to Table 7-9.The equilibrium market price for 10 piano lessons is $300.What is the total producer surplus in the market?

Correct AnswerverifiedShow Answer

A supply curve can be used to measure producer surplus because it reflects

Correct AnswerverifiedShow Answer

Figure 7-17 -Refer to Figure 7-17.When the price is P1,area B represents

Correct AnswerverifiedShow Answer

Table 7-7 The following table represents the costs of five possible sellers. -Refer to Table 7-7.If the price is $775,who would be willing to supply the product?

Correct AnswerverifiedShow Answer

Producer surplus directly measures

Correct AnswerverifiedShow Answer

Bill created a new software program he is willing to sell for $300.He sells his first copy and enjoys a producer surplus of $250.What is the price paid for the software?

Correct AnswerverifiedShow Answer

Table 7-11 -Refer to Table 7-11.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

Correct AnswerverifiedShow Answer

Sarah buys a new MP3 player for $135.She receives consumer surplus of $25 on her purchase if her willingness to pay is

Correct AnswerverifiedShow Answer

Inefficiency can be caused in a market by the presence of

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

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