Question 1

Economists argue that restrictions against ticket scalping actually drive up the cost of many tickets.

Accepted Answer

A) True 
 B)False

Question 2

Figure 7-20  
-Refer to Figure 7-20. The equilibrium allocation of resources is

Accepted Answer

A) efficient because total surplus is maximized at the equilibrium. 
B) efficient because consumer surplus is maximized at the equilibrium. 
C) inefficient because consumer surplus is larger than producer surplus at the equilibrium. 
D) inefficient because total surplus is maximized when 10 units of output are produced and sold. 
A) efficient because total surplus is maximized at the equilibrium. 
B) efficient because consumer surplus is maximized at the equilibrium. 
C) inefficient because consumer surplus is larger than producer surplus at the equilibrium. 
D) inefficient because total surplus is maximized when 10 units of output are produced and sold.

Question 3

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

Accepted Answer

A) total surplus. 
B) producer surplus. 
C) consumer surplus. 
D) None of the above is correct. 
A) total surplus. 
B) producer surplus. 
C) consumer surplus. 
D) None of the above is correct.

Question 4

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 5

Table 7-2
This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. $$\begin{array} { | l | l | } 
\hline \text { Buyer } & \text { Willinenes Ta Raz } \
\hline \text { David } & \$ 8.50 \
\hline \text { Laura } & \$ 7.00 \
\hline \text { Mepan } & \$ 5.50 \
\hline \text { Mallary } & \$ 4.00 \
\hline \text { Audrey } & \$ 3.50 \
\hline
\end{array}$$
-Refer to Table 7-2. If the market price is $5.50, the consumer surplus in the market will be

Accepted Answer

A) $3.00. 
B) $4.50. 
C) $15.50. 
D) $21.00. 
A) $3.00. 
B) $4.50. 
C) $15.50. 
D) $21.00.

Question 6

Table 7-9
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality. $$\begin{array} { | c | c | } 
\hline \text { Sallar } & \text { Cast } \
\hline \text { Marcia } & \$ 200 \
\hline \text { Jan } & \$ 250 \
\hline \text { Cindy } & \$ 350 \
\hline \text { Grea } & \$ 400 \
\hline \text { Peter } & \$ 700 \
\hline \text { Babby } & \$ 800 \
\hline
\end{array}$$
-Refer to Table 7-9. You wish to purchase 10 piano lessons, so you take bids from each of the sellers. You will not accept a bid below a seller's cost because you are concerned that the seller will not provide all 10 lessons. What bid will you accept?

Accepted Answer

A) $351 
B) $251 
C) $249 
D) $199 
A) $351 
B) $251 
C) $249 
D) $199

Question 7

Figure 7-1  
-Refer to Figure 7-1. If the price of the good is $150, then consumer surplus amounts to

Accepted Answer

A) $150. 
B) $200. 
C) $250. 
D) $300. 
A) $150. 
B) $200. 
C) $250. 
D) $300.

Question 8

Figure 7-20  
-Refer to Figure 7-20. If 6 units of the good are produced and sold, then

Accepted Answer

A) consumer surplus is maximized. 
B) producer surplus is maximized. 
C) the sum of consumer surplus and producer surplus is maximized. 
D) the marginal value to buyers exceeds the marginal cost to sellers. 
A) consumer surplus is maximized. 
B) producer surplus is maximized. 
C) the sum of consumer surplus and producer surplus is maximized. 
D) the marginal value to buyers exceeds the marginal cost to sellers.

Question 9

Producer surplus measures the benefit to sellers from receiving a price above their costs.

Accepted Answer

A) True 
 B)False

Question 10

If the United States changed its laws to allow for the legal sale of a kidney, which of the following is least likely to occur?

Accepted Answer

A) The supply of kidneys would increase. 
B) The shortage of kidneys would decrease. 
C) Many lives would be saved. 
D) The allocation of kidneys would be fair. 
A) The supply of kidneys would increase. 
B) The shortage of kidneys would decrease. 
C) Many lives would be saved. 
D) The allocation of kidneys would be fair.

Question 11

The area below the demand curve and above the supply curve measures the producer surplus in a market.

Accepted Answer

A) True 
 B)False

Question 12

The French expression used by free-market advocates, which literally translates as "allow them to do," is

Accepted Answer

A) laissez-faire. 
B) je ne sais pas. 
C) si'l vous plait. 
D) tête-à-tête. 
A) laissez-faire. 
B) je ne sais pas. 
C) si'l vous plait. 
D) tête-à-tête.

Question 13

Producer surplus measures the

Accepted Answer

A) benefits to sellers of participating in a market. 
B) costs to sellers of participating in a market. 
C) price that buyers are willing to pay for sellers' output of a good or service. 
D) benefit to sellers of producing a greater quantity of a good or service than buyers demand. 
A) benefits to sellers of participating in a market. 
B) costs to sellers of participating in a market. 
C) price that buyers are willing to pay for sellers' output of a good or service. 
D) benefit to sellers of producing a greater quantity of a good or service than buyers demand.

Question 14

Table 7-9
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality. $$\begin{array} { | c | c | } 
\hline \text { Sallar } & \text { Cast } \
\hline \text { Marcia } & \$ 200 \
\hline \text { Jan } & \$ 250 \
\hline \text { Cindy } & \$ 350 \
\hline \text { Grea } & \$ 400 \
\hline \text { Peter } & \$ 700 \
\hline \text { Babby } & \$ 800 \
\hline
\end{array}$$
-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) $1,500 
A) $50 
B) $150 
C) $1,050 
D) $1,500

Question 15

Figure 7-18  
-Refer to Figure 7-18. Assume demand increases and as a result, equilibrium price increases to $22 and equilibrium quantity increases to 110. The increase in producer surplus would be

Accepted Answer

A) $210. 
B) $360. 
C) $480. 
D) $570. 
A) $210. 
B) $360. 
C) $480. 
D) $570.

Question 16

Table 7-10
 $$\begin{array} { | l | r | } 
\hline \text { Seller } & \text { Cost } \
\hline \text { Lepran } & \$ 700 \
\hline \text { Kabe } & \$ 600 \
\hline \text { Kevin } & \$ 450 \
\hline \text { Steve } & \$ 400 \
\hline
\end{array}$$
-Refer to Table 7-10. 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. You take bids from the sellers. Who offers the winning bid, and what does he offer to charge for the photography session?

Accepted Answer

A) Steve; more than $400 but less than $450 
B) Steve; $399 
C) LeBron; more than $700 
D) LeBron; more than $600 but less than $700 
A) Steve; more than $400 but less than $450 
B) Steve; $399 
C) LeBron; more than $700 
D) LeBron; more than $600 but less than $700

Question 17

Efficiency in a market is achieved when

Accepted Answer

A) a social planner intervenes and sets the quantity of output after evaluating buyers' willingness to pay and sellers' costs. 
B) the sum of producer surplus and consumer surplus is maximized. 
C) all firms are producing the good at the same low cost per unit. 
D) no buyer is willing to pay more than the equilibrium price for any unit of the good. 
A) a social planner intervenes and sets the quantity of output after evaluating buyers' willingness to pay and sellers' costs. 
B) the sum of producer surplus and consumer surplus is maximized. 
C) all firms are producing the good at the same low cost per unit. 
D) no buyer is willing to pay more than the equilibrium price for any unit of the good.

Question 18

Figure 7-8  
-Refer to Figure 7-8. Which area represents the increase in producer surplus when the price rises from P1 to P2?

Accepted Answer

A) BCG 
B) ACH 
C) ABGD 
D) AHGB 
A) BCG 
B) ACH 
C) ABGD 
D) AHGB

Question 19

Figure 7-6  
-Refer to Figure 7-6. What is the consumer surplus if the price is $100?

Accepted Answer

A) $2,500 
B) $5,000 
C) $10,000 
D) $20,000 
A) $2,500 
B) $5,000 
C) $10,000 
D) $20,000

Question 20

Suppose Larry, Moe, and Curly are bidding in an auction for a mint-condition video of Charlie Chaplin's first movie. Each has in mind a maximum amount that he will bid. This maximum is called

Accepted Answer

A) a resistance price. 
B) willingness to pay. 
C) consumer surplus. 
D) producer surplus. 
A) a resistance price. 
B) willingness to pay. 
C) consumer surplus. 
D) producer surplus.

Economists argue that restrictions against ticket scalping actually drive up the cost of many tickets.

Figure 7-20 -Refer to Figure 7-20. The equilibrium allocation of resources is

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

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

Table 7-2 This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. Buyer Willinenes Ta Raz David \ 8.50 Laura \ 7.00 Mepan \ 5.50 Mallary \ 4.00 Audrey \ 3.50 -Refer to Table 7-2. If the market price is $5.50, the consumer surplus in the market will be

Figure 7-1 -Refer to Figure 7-1. If the price of the good is $150, then consumer surplus amounts to

Figure 7-20 -Refer to Figure 7-20. If 6 units of the good are produced and sold, then

Producer surplus measures the benefit to sellers from receiving a price above their costs.

If the United States changed its laws to allow for the legal sale of a kidney, which of the following is least likely to occur?

The area below the demand curve and above the supply curve measures the producer surplus in a market.

The French expression used by free-market advocates, which literally translates as "allow them to do," is

Producer surplus measures the

Figure 7-18 -Refer to Figure 7-18. Assume demand increases and as a result, equilibrium price increases to $22 and equilibrium quantity increases to 110. The increase in producer surplus would be

Efficiency in a market is achieved when

Figure 7-8 -Refer to Figure 7-8. Which area represents the increase in producer surplus when the price rises from P1 to P2?

Figure 7-6 -Refer to Figure 7-6. What is the consumer surplus if the price is $100?

Suppose Larry, Moe, and Curly are bidding in an auction for a mint-condition video of Charlie Chaplin's first movie. Each has in mind a maximum amount that he will bid. This maximum is called

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

Application: The Costs of Taxation

Application: International Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomic Models

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 Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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

Economists argue that restrictions against ticket scalping actually drive up the cost of many tickets.

Figure 7-20 -Refer to Figure 7-20. The equilibrium allocation of resources is

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

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

Table 7-2 This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. Buyer Willinenes Ta Raz David \ 8.50 Laura \ 7.00 Mepan \ 5.50 Mallary \ 4.00 Audrey \ 3.50 -Refer to Table 7-2. If the market price is $5.50, the consumer surplus in the market will be

Figure 7-1 -Refer to Figure 7-1. If the price of the good is $150, then consumer surplus amounts to

Figure 7-20 -Refer to Figure 7-20. If 6 units of the good are produced and sold, then

Producer surplus measures the benefit to sellers from receiving a price above their costs.

If the United States changed its laws to allow for the legal sale of a kidney, which of the following is least likely to occur?

The area below the demand curve and above the supply curve measures the producer surplus in a market.

The French expression used by free-market advocates, which literally translates as "allow them to do," is

Producer surplus measures the

Figure 7-18 -Refer to Figure 7-18. Assume demand increases and as a result, equilibrium price increases to $22 and equilibrium quantity increases to 110. The increase in producer surplus would be

Efficiency in a market is achieved when

Figure 7-8 -Refer to Figure 7-8. Which area represents the increase in producer surplus when the price rises from P1 to P2?

Figure 7-6 -Refer to Figure 7-6. What is the consumer surplus if the price is $100?

Suppose Larry, Moe, and Curly are bidding in an auction for a mint-condition video of Charlie Chaplin's first movie. Each has in mind a maximum amount that he will bid. This maximum is called

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

Application: The Costs of Taxation

Application: International Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomic Models

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 Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters