Question 1

For calculating producer surplus,it is important to distinguish between the minimum price at which a seller is willing to sell a good and the seller's cost.

Accepted Answer

A) True 
 B)False  False

Question 2

The total surplus generated in the market for blackberries is the total net gain to consumers in that market.

Accepted Answer

A) True 
 B)False  False

Question 3

Use the following to answer question:  
-(Table: Pumpkin Market)There are two consumers,Andy and Ben,in the market for pumpkins.Their willingness to pay for each pumpkin is shown in the table Pumpkin Market.There are two producers of pumpkins,Cindy and Diane,and their costs are also shown.The equilibrium price for pumpkins is $8 and the equilibrium quantity is 5.At the equilibrium price and quantity,Ben buys _____ pumpkins,and his consumer surplus is _____.

Accepted Answer

A) four;$2 
B) three;$6 
C) two;$4 
D) one;$3 
A) four;$2 
B) three;$6 
C) two;$4 
D) one;$3 C

Question 4

Use the following to answer question:  
-(Table: Consumer Surplus and Phantom Tickets)The table Consumer Surplus and Phantom Tickets shows each student's willingness to pay for a Phantom of the Opera ticket.Assume that each student wants to buy one ticket.If the price of a ticket to see Phantom of the Opera is $50,then Robert's consumer surplus is:

Accepted Answer

A) $60. 
B) $50. 
C) $10. 
D) $240. 
A) $60. 
B) $50. 
C) $10. 
D) $240.

Question 5

(Figure: The Market for Sandwiches)Look at the figure The Market for Sandwiches.At the competitive price of $5,10 sandwiches are sold.At this competitive price,consumer surplus equals _____ and producer surplus equals _____.

Accepted Answer

A) $50;$50 
B) $100;$50 
C) $50;$25 
D) $100;$25 
A) $50;$50 
B) $100;$50 
C) $50;$25 
D) $100;$25

Question 6

Use the following to answer question:  
-(Figure: Producer Surplus III)Look at the figure Producer Surplus III.If the price of the good decreases from $2 to $1,producer surplus will decrease by:

Accepted Answer

A) $5. 
B) $15. 
C) $25. 
D) $35. 
A) $5. 
B) $15. 
C) $25. 
D) $35.

Question 7

Use the following to answer question:  
-(Table: Producer Surplus and Phantom Tickets)The table Producer Surplus and Phantom Tickets shows the minimum price at which each of the students is willing to sell a ticket to Phantom of the Opera.Assume that each student has only one ticket to sell.If the price for Phantom tickets is $140 and there is no other market for tickets,total producer surplus for these five students is:

Accepted Answer

A) $139. 
B) $110. 
C) $40. 
D) $379. 
A) $139. 
B) $110. 
C) $40. 
D) $379.

Question 8

(Figure: Gain in Producer Surplus)Look at the figure Gain in Producer Surplus.Which areas represent producer surplus when the price is equal to P2?

Accepted Answer

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

Question 9

Use the following to answer question:  
-(Figure: The Market for Hamburgers)The figure The Market for Hamburgers shows the weekly market for hamburgers in Tuscaloosa.If the price of a burger is $2,consumer surplus will equal:

Accepted Answer

A) $650. 
B) $400. 
C) $225. 
D) $450. 
A) $650. 
B) $400. 
C) $225. 
D) $450.

Question 10

If there is an increase in supply,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus:

Accepted Answer

A) will increase. 
B) will decrease. 
C) will remain the same. 
D) may change,but we can't tell how. 
A) will increase. 
B) will decrease. 
C) will remain the same. 
D) may change,but we can't tell how.

Question 11

Consumer surplus is the amount buyers actually pay for a good minus the maximum amount they are willing to pay for it.

Accepted Answer

A) True 
 B)False

Question 12

If a frost destroys much of the grapefruit crop,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus in the grapefruit market:

Accepted Answer

A) will increase. 
B) will decrease. 
C) will not change. 
D) may change,but we cannot determine the change without more information. 
A) will increase. 
B) will decrease. 
C) will not change. 
D) may change,but we cannot determine the change without more information.

Question 13

Policies designed to promote efficiency will never decrease equity;however,policies designed to promote equity will usually decrease efficiency.

Accepted Answer

A) True 
 B)False

Question 14

Use the following to answer question:  
-(Table: Pumpkin Market)There are two consumers,Andy and Ben,in the market for pumpkins.Their willingness to pay for each pumpkin is shown in the table Pumpkin Market.There are two producers of pumpkins,Cindy and Diane,and their costs are also shown.The equilibrium price for pumpkins is $8 and the equilibrium quantity is 5.At the equilibrium price and quantity,Cindy sells _____ pumpkins,and her producer surplus is _____.

Accepted Answer

A) four;$2 
B) three;$8 
C) two;$3 
D) one;$5 
A) four;$2 
B) three;$8 
C) two;$3 
D) one;$5

Question 15

Luis is willing to sell his pool table for no less than $600,but if he gets $840,the producer surplus Luis receives is:

Accepted Answer

A) $600. 
B) $840. 
C) $240. 
D) $1,440. 
A) $600. 
B) $840. 
C) $240. 
D) $1,440.

Question 16

Use the following to answer question:  
-(Figure: The Gains from Trade)Look at the figure The Gains from Trade.What is the total surplus in this market when the demand curve is D2 and the market is in equilibrium?

Accepted Answer

A) $31.25 
B) $45.00 
C) $62.50 
D) $90.00 
A) $31.25 
B) $45.00 
C) $62.50 
D) $90.00

Question 17

Use the following to answer question:  
-(Table: Willingness to Pay for Basketball Sneakers)The table Willingness to Pay for Basketball Sneakers shows each consumer's willingness to pay for basketball sneakers.Assume that each consumer wants to buy at most,one pair of sneakers.If the price of basketball sneakers is $145,which consumer will purchase sneakers?

Accepted Answer

A) Jamichael 
B) Corey 
C) Rudy 
D) Ray 
A) Jamichael 
B) Corey 
C) Rudy 
D) Ray

Question 18

Equilibrium in the market for peanut butter is disturbed by an increase in the price of peanuts.Assuming that the supply curve of peanut butter is upward-sloping,producer surplus in the peanut butter market:

Accepted Answer

A) will increase. 
B) will decrease. 
C) will not change. 
D) may change,but we cannot determine the change without more information. 
A) will increase. 
B) will decrease. 
C) will not change. 
D) may change,but we cannot determine the change without more information.

Question 19

Use the following to answer question:  
-(Table: Consumer Surplus and Phantom Tickets)The table Consumer Surplus and Phantom Tickets shows each student's willingness to pay for a Phantom of the Opera ticket.Assume that each student wants to buy one ticket.If the box office price of a ticket to see Phantom of the Opera is $50 and there is no other market for tickets,the total consumer surplus for the five students is:

Accepted Answer

A) $100. 
B) $175. 
C) $230. 
D) $240. 
A) $100. 
B) $175. 
C) $230. 
D) $240.

Question 20

Use the following to answer question:  
-(Figure: Consumer Surplus I)Look at the figure Consumer Surplus I.If the good is being given away for free,consumer surplus equals the area:

Accepted Answer

A) ABP2. 
B) AFP1. 
C) BGF. 
D) AQ30. 
A) ABP2. 
B) AFP1. 
C) BGF. 
D) AQ30.

For calculating producer surplus,it is important to distinguish between the minimum price at which a seller is willing to sell a good and the seller's cost.

The total surplus generated in the market for blackberries is the total net gain to consumers in that market.

(Figure: The Market for Sandwiches)Look at the figure The Market for Sandwiches.At the competitive price of $5,10 sandwiches are sold.At this competitive price,consumer surplus equals _ and producer surplus equals _.

Use the following to answer question: -(Figure: Producer Surplus III)Look at the figure Producer Surplus III.If the price of the good decreases from $2 to $1,producer surplus will decrease by:

(Figure: Gain in Producer Surplus)Look at the figure Gain in Producer Surplus.Which areas represent producer surplus when the price is equal to P₂?

Use the following to answer question: -(Figure: The Market for Hamburgers)The figure The Market for Hamburgers shows the weekly market for hamburgers in Tuscaloosa.If the price of a burger is $2,consumer surplus will equal:

If there is an increase in supply,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus:

Consumer surplus is the amount buyers actually pay for a good minus the maximum amount they are willing to pay for it.

If a frost destroys much of the grapefruit crop,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus in the grapefruit market:

Policies designed to promote efficiency will never decrease equity;however,policies designed to promote equity will usually decrease efficiency.

Luis is willing to sell his pool table for no less than $600,but if he gets $840,the producer surplus Luis receives is:

Use the following to answer question: -(Figure: The Gains from Trade)Look at the figure The Gains from Trade.What is the total surplus in this market when the demand curve is D₂ and the market is in equilibrium?

Equilibrium in the market for peanut butter is disturbed by an increase in the price of peanuts.Assuming that the supply curve of peanut butter is upward-sloping,producer surplus in the peanut butter market:

Use the following to answer question: -(Figure: Consumer Surplus I)Look at the figure Consumer Surplus I.If the good is being given away for free,consumer surplus equals the area:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

Exam 4: Consumer and Producer Surplus

For calculating producer surplus,it is important to distinguish between the minimum price at which a seller is willing to sell a good and the seller's cost.

The total surplus generated in the market for blackberries is the total net gain to consumers in that market.

(Figure: The Market for Sandwiches)Look at the figure The Market for Sandwiches.At the competitive price of $5,10 sandwiches are sold.At this competitive price,consumer surplus equals _____ and producer surplus equals _____.

Use the following to answer question: -(Figure: Producer Surplus III)Look at the figure Producer Surplus III.If the price of the good decreases from $2 to $1,producer surplus will decrease by:

(Figure: Gain in Producer Surplus)Look at the figure Gain in Producer Surplus.Which areas represent producer surplus when the price is equal to P2?

Use the following to answer question: -(Figure: The Market for Hamburgers)The figure The Market for Hamburgers shows the weekly market for hamburgers in Tuscaloosa.If the price of a burger is $2,consumer surplus will equal:

If there is an increase in supply,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus:

Consumer surplus is the amount buyers actually pay for a good minus the maximum amount they are willing to pay for it.

If a frost destroys much of the grapefruit crop,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus in the grapefruit market:

Policies designed to promote efficiency will never decrease equity;however,policies designed to promote equity will usually decrease efficiency.

Luis is willing to sell his pool table for no less than $600,but if he gets $840,the producer surplus Luis receives is:

Use the following to answer question: -(Figure: The Gains from Trade)Look at the figure The Gains from Trade.What is the total surplus in this market when the demand curve is D2 and the market is in equilibrium?

Equilibrium in the market for peanut butter is disturbed by an increase in the price of peanuts.Assuming that the supply curve of peanut butter is upward-sloping,producer surplus in the peanut butter market:

Use the following to answer question: -(Figure: Consumer Surplus I)Look at the figure Consumer Surplus I.If the good is being given away for free,consumer surplus equals the area:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

(Figure: The Market for Sandwiches)Look at the figure The Market for Sandwiches.At the competitive price of $5,10 sandwiches are sold.At this competitive price,consumer surplus equals _ and producer surplus equals _.

(Figure: Gain in Producer Surplus)Look at the figure Gain in Producer Surplus.Which areas represent producer surplus when the price is equal to P₂?

Use the following to answer question: -(Figure: The Gains from Trade)Look at the figure The Gains from Trade.What is the total surplus in this market when the demand curve is D₂ and the market is in equilibrium?