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

Suppose there is an early freeze in California that reduces the size of the lemon crop. What happens to consumer surplus in the market for lemons?

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 $40 each, then what is the total consumer surplus in the market?

Oil is used to produce gasoline. If the price of oil increases, consumer surplus in the gasoline market

Table 7-16 -Refer to Table 7-16. The equilibrium price is

Table 7-10 The following table represents the costs of five possible sellers. Seller Cost Abby $1,600 Bobby $1,300 Dianne $1,100 Evaline $900 Carlos $800 -Refer to Table 7-10. Who is a marginal seller when the price is $1,100?

Table 7-14 Seller Cost LeBron $700 Kobe $600 Kevin $450 Steve $400 -Refer to Table 7-14. You want to hire a professional photographer to take pictures of your family. The table shows the costs of the four potential sellers in the local photography market. Which of the following graphs represents the market supply curve?

If the government removes a binding price ceiling in a market, then the producer surplus in that market will increase.

Welfare economics is the study of how

Figure 7-31 -Refer to Figure 7-31. If the market equilibrium price rises from $25 to $35, how much is the producer surplus for the producers entering the market after the price increase?

All else equal, what happens to consumer surplus if the price of a good increases?

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 $5.50, the consumer surplus in the market will be

Table 7-15 The following table represents the costs of five possible sellers. Seller Cost ($) Quentin 10 Ruby 30 Sandra 60 Thomas 100 Ursula 150 -Refer to Table 7-15. Suppose each of the five sellers can supply at most one unit of the good. At which of the following prices would the market quantity supplied be exactly three units?

Figure 7-34 -Refer to Figure 7-34. Suppose there is initially a price ceiling set at $4 in this market. How much is total producer surplus with the price ceiling in place?

Scenario 7-2 Suppose market demand and market supply are given by the equations: -Refer to Scenario 7-2. How much is total surplus at the equilibrium price in this market?

If the current allocation of resources in the market for hammers is inefficient, then it must be the case that

The "invisible hand" is

Suppose you buy an iPod for $100. If your consumer surplus is $30, your willingness to pay is $70.

Figure 7-12 -Refer to Figure 7-12. If the equilibrium price is $350, what is the producer surplus?

Table 7-16 -Refer to Table 7-16. Both the demand curve and the supply curve are straight lines. At equilibrium, consumer surplus is

Figure 7-17 -Refer to Figure 7-17. If the supply curve is S and the demand curve is D, what is total producer surplus at the equilibrium price?