Question 1

At the equilibrium price of a good, the good will be sold by those sellers

Accepted Answer

A) whose cost is more than price. 
B) whose cost is less than price. 
C) that can produce the good. 
D) enter the market first. 
A) whose cost is more than price. 
B) whose cost is less than price. 
C) that can produce the good. 
D) enter the market first.

Question 2

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. The market quantity of oranges demanded per day is exactly 7 if the price of an orange, P, satisfies

Accepted Answer

A) $0.60 < P < $0.75. 
B) $0.60 < P < $2.00. 
C) $0.25 < P < $0.75. 
D) $0.25 < P < $0.60. 
A) $0.60 < P < $0.75. 
B) $0.60 < P < $2.00. 
C) $0.25 < P < $0.75. 
D) $0.25 < P < $0.60.

Question 3

Figure 7-4  
-Refer to Figure 7-4. When the price falls from P1 to P2, which area represents the increase in consumer surplus to new buyers entering the market?

Accepted Answer

A) BDF 
B) AFG 
C) BCGD 
D) ABC 
A) BDF 
B) AFG 
C) BCGD 
D) ABC

Question 4

Figure 7-26  
-Refer to Figure 7-26. At the equilibrium price, consumer surplus is

Accepted Answer

A) $600. 
B) $900. 
C) $1,500. 
D) $1,800. 
A) $600. 
B) $900. 
C) $1,500. 
D) $1,800.

Question 5

Total surplus

Accepted Answer

A) can be used to measure a market's efficiency. 
B) is the sum of consumer and producer surplus. 
C) is the value to buyers minus the cost to sellers. 
D) All of the above are correct. 
A) can be used to measure a market's efficiency. 
B) is the sum of consumer and producer surplus. 
C) is the value to buyers minus the cost to sellers. 
D) All of the above are correct.

Question 6

Figure 7-11  
-Refer to Figure 7-11. If the supply curve is S, the demand curve is D, and the equilibrium price is $100, what is the producer surplus?

Accepted Answer

A) $625 
B) $1,250 
C) $2,500 
D) $5,000 
A) $625 
B) $1,250 
C) $2,500 
D) $5,000

Question 7

Each seller of a product is willing to sell as long as the price he or she can receive is greater than the opportunity cost of producing the product.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) $28. 
B) $41. 
C) $43. 
D) $405. 
A) $28. 
B) $41. 
C) $43. 
D) $405.

Question 9

Figure 7-1  
-Refer to Figure 7-1. If the price of the good is $50, then consumer surplus amounts to

Accepted Answer

A) $400. 
B) $500. 
C) $600. 
D) $750. 
A) $400. 
B) $500. 
C) $600. 
D) $750.

Question 10

Figure 7-8  
-Refer to Figure 7-8. At the equilibrium price, consumer surplus is

Accepted Answer

A) $1,050. 
B) $1,225. 
C) $1,575. 
D) $2,450. 
A) $1,050. 
B) $1,225. 
C) $1,575. 
D) $2,450.

Question 11

Table 7-1  
-Refer to Table 7-1. If the market price is $105,

Accepted Answer

A) Calvin's consumer surplus is $45 and total consumer surplus is $85. 
B) Sam's consumer surplus is $30 and total consumer surplus is $90. 
C) Andrew's consumer surplus is $15 and total consumer surplus is $67.50. 
D) Lori's consumer surplus is -$2 and total consumer surplus is $100. 
A) Calvin's consumer surplus is $45 and total consumer surplus is $85. 
B) Sam's consumer surplus is $30 and total consumer surplus is $90. 
C) Andrew's consumer surplus is $15 and total consumer surplus is $67.50. 
D) Lori's consumer surplus is -$2 and total consumer surplus is $100.

Question 12

Figure 7-13  
-Refer to Figure 7-13. If the equilibrium price rises from $60 to $120, what is the additional producer surplus to initial producers in the market?

Accepted Answer

A) $1,200 
B) $2,400 
C) $3,600 
D) $4,800 
A) $1,200 
B) $2,400 
C) $3,600 
D) $4,800

Question 13

Moving production from a high-cost producer to a low-cost producer will

Accepted Answer

A) lower total surplus. 
B) raise total surplus. 
C) lower producer surplus. 
D) raise producer surplus but lower consumer surplus. 
A) lower total surplus. 
B) raise total surplus. 
C) lower producer surplus. 
D) raise producer surplus but lower consumer surplus.

Question 14

Figure 7-34  
-Refer to Figure 7-34. Suppose the government imposes a price floor at $10 per unit in this market. With the price floor, how much is total consumer surplus?

Accepted Answer

Total consumer surpl

Question 15

Table 7-7  
-Refer to Table 7-7. You have two essentially identical 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. You hold an auction to sell the two tickets. Michael and Earvin each offer to pay $360 for a ticket, and you sell them the two tickets. What is the total consumer surplus in the market?

Accepted Answer

A) $720 
B) $180 
C) $140 
D) $40 
A) $720 
B) $180 
C) $140 
D) $40

Question 16

Producer surplus is the

Accepted Answer

A) area under the supply curve to the left of the amount sold. 
B) amount a seller is paid minus the cost of production. 
C) area between the supply and demand curves, above the equilibrium price. 
D) cost to sellers of participating in a market. 
A) area under the supply curve to the left of the amount sold. 
B) amount a seller is paid minus the cost of production. 
C) area between the supply and demand curves, above the equilibrium price. 
D) cost to sellers of participating in a market.

Question 17

If the cost of producing sofas decreases, then consumer surplus in the sofa market will

Accepted Answer

A) increase. 
B) decrease. 
C) remain constant. 
D) increase for some buyers and decrease for other buyers. 
A) increase. 
B) decrease. 
C) remain constant. 
D) increase for some buyers and decrease for other buyers.

Question 18

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 market price is $3.80,

Accepted Answer

A) David's consumer surplus is $4.70 and total consumer surplus for the five individuals is $9.50. 
B) Megan's consumer surplus is $1.70 and total consumer surplus for the five individuals is $9.80. 
C) David, Laura, and Megan will be the only buyers of Vanilla Coke. 
D) the demand curve for Vanilla Coke, taking the five individuals into account, is horizontal. 
A) David's consumer surplus is $4.70 and total consumer surplus for the five individuals is $9.50. 
B) Megan's consumer surplus is $1.70 and total consumer surplus for the five individuals is $9.80. 
C) David, Laura, and Megan will be the only buyers of Vanilla Coke. 
D) the demand curve for Vanilla Coke, taking the five individuals into account, is horizontal.

Question 19

On a graph, consumer surplus is represented by the area

Accepted Answer

A) between the demand and supply curves. 
B) below the demand curve and above price. 
C) below the price and above the supply curve. 
D) below the demand curve and to the right of equilibrium price. 
A) between the demand and supply curves. 
B) below the demand curve and above price. 
C) below the price and above the supply curve. 
D) below the demand curve and to the right of equilibrium price.

Question 20

Henry is willing to pay 45 cents, and Janine is willing to pay 55 cents, for 1 pound of bananas. When the price of bananas falls from 50 cents a pound to 40 cents a pound,

Accepted Answer

A) Henry experiences an increase in consumer surplus, but Janine does not. 
B) Janine experiences an increase in consumer surplus, but Henry does not. 
C) both Janine and Henry experience an increase in consumer surplus. 
D) neither Janine nor Henry experiences an increase in consumer surplus. 
A) Henry experiences an increase in consumer surplus, but Janine does not. 
B) Janine experiences an increase in consumer surplus, but Henry does not. 
C) both Janine and Henry experience an increase in consumer surplus. 
D) neither Janine nor Henry experiences an increase in consumer surplus.

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

At the equilibrium price of a good, the good will be sold by those sellers

Figure 7-4 -Refer to Figure 7-4. When the price falls from P1 to P2, which area represents the increase in consumer surplus to new buyers entering the market?

Figure 7-26 -Refer to Figure 7-26. At the equilibrium price, consumer surplus is

Total surplus

Figure 7-11 -Refer to Figure 7-11. If the supply curve is S, the demand curve is D, and the equilibrium price is $100, what is the producer surplus?

Each seller of a product is willing to sell as long as the price he or she can receive is greater than the opportunity cost of producing the product.

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

Figure 7-1 -Refer to Figure 7-1. If the price of the good is $50, then consumer surplus amounts to

Figure 7-8 -Refer to Figure 7-8. At the equilibrium price, consumer surplus is

Table 7-1 -Refer to Table 7-1. If the market price is $105,

Figure 7-13 -Refer to Figure 7-13. If the equilibrium price rises from $60 to $120, what is the additional producer surplus to initial producers in the market?

Moving production from a high-cost producer to a low-cost producer will

Figure 7-34 -Refer to Figure 7-34. Suppose the government imposes a price floor at $10 per unit in this market. With the price floor, how much is total consumer surplus?

Producer surplus is the

If the cost of producing sofas decreases, then consumer surplus in the sofa market will

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 market price is $3.80,

On a graph, consumer surplus is represented by the area

Henry is willing to pay 45 cents, and Janine is willing to pay 55 cents, for 1 pound of bananas. When the price of bananas falls from 50 cents a pound to 40 cents a pound,

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Applications: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring a Nation S Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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