Question 1

Consumer surplus is the

Accepted Answer

A) amount of a good consumers get without paying anything. 
B) amount a consumer pays minus the amount the consumer is willing to pay. 
C) amount a consumer is willing to pay minus the amount the consumer actually pays. 
D) value of a good to a consumer. 
A) amount of a good consumers get without paying anything. 
B) amount a consumer pays minus the amount the consumer is willing to pay. 
C) amount a consumer is willing to pay minus the amount the consumer actually pays. 
D) value of a good to a consumer. C

Question 2

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 D

Question 3

Ray buys a new tractor for $118,000.He receives consumer surplus of $13,000 on his purchase.Ray's willingness to pay is

Accepted Answer

A) $13,000. 
B) $105,000. 
C) $118,000. 
D) $131,000. 
A) $13,000. 
B) $105,000. 
C) $118,000. 
D) $131,000. D

Question 4

You are offered a free ticket to see the Chicago Cubs play the Chicago White Sox at Wrigley Field.Assume the ticket has no resale value.Willie Nelson is performing on the same night,and his concert is your next-best alternative activity.Tickets to see Willie Nelson cost $40.On any given day,you would be willing to pay up to $50 to see and hear Willie Nelson perform.Assume there are no other costs of seeing either event.Based on this information,at a minimum,how much would you have to value seeing the Cubs play the White Sox to accept the ticket and go to the game?

Accepted Answer

A) $0 
B) $10 
C) $40 
D) $50 
A) $0 
B) $10 
C) $40 
D) $50

Question 5

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.

Question 6

Figure 7-3  
-Refer to Figure 7-3.When the price is P1,consumer surplus is

Accepted Answer

A) A. 
B) A+B. 
C) A+B+C. 
D) A+B+D. 
A) A. 
B) A+B. 
C) A+B+C. 
D) A+B+D.

Question 7

Bob purchases a book,and his consumer surplus is $3.If Bob is willing to pay $8 for the book,then the price of the book must be

Accepted Answer

A) $3. 
B) $8. 
C) $5. 
D) $11. 
A) $3. 
B) $8. 
C) $5. 
D) $11.

Question 8

Suppose Katie,Kendra,and Kristen each purchase a particular type of cell phone at a price of $80.Katie's willingness to pay was $100,Kendra's willingness to pay was $95,and Kristen's willingness to pay was $80.Which of the following statements is correct?

Accepted Answer

A) For the three individuals together,consumer surplus amounts to $35. 
B) Having bought the cell phone,Kristen is better off than she would have been had she not bought it. 
C) Had the price of the cell phone been $95 rather than $80,Katie and Kendra definitely would have been buyers and Kristen definitely would not have been a buyer. 
D) The fact that all three individuals paid $80 for the same type of cell phone indicates that each one placed the same value on that cell phone. 
A) For the three individuals together,consumer surplus amounts to $35. 
B) Having bought the cell phone,Kristen is better off than she would have been had she not bought it. 
C) Had the price of the cell phone been $95 rather than $80,Katie and Kendra definitely would have been buyers and Kristen definitely would not have been a buyer. 
D) The fact that all three individuals paid $80 for the same type of cell phone indicates that each one placed the same value on that cell phone.

Question 9

Janine would be willing to pay $50 to see Les Misérables,but she buys a ticket for only $30.Janine values the performance at

Accepted Answer

A) $20. 
B) $30. 
C) $50. 
D) $80. 
A) $20. 
B) $30. 
C) $50. 
D) $80.

Question 10

Consumer surplus is

Accepted Answer

A) the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. 
B) the amount a buyer is willing to pay for a good minus the cost of producing the good. 
C) the amount by which the quantity supplied of a good exceeds the quantity demanded of the good. 
D) a buyer's willingness to pay for a good plus the price of the good. 
A) the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. 
B) the amount a buyer is willing to pay for a good minus the cost of producing the good. 
C) the amount by which the quantity supplied of a good exceeds the quantity demanded of the good. 
D) a buyer's willingness to pay for a good plus the price of the good.

Question 11

Figure 7-4  
-Refer to Figure 7-4.Which area represents the increase in consumer surplus when the price falls from P1 to P2?

Accepted Answer

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

Question 12

Figure 7-1  
-Refer to Figure 7-1.If the price of the good is $250,then consumer surplus amounts to

Accepted Answer

A) $50. 
B) $100. 
C) $150. 
D) $200. 
A) $50. 
B) $100. 
C) $150. 
D) $200.

Question 13

Figure 7-8  
-Refer to Figure 7-8.If the government imposes a price floor of $100 in this market,then consumer surplus will decrease by

Accepted Answer

A) $150. 
B) $325. 
C) $650. 
D) $675. 
A) $150. 
B) $325. 
C) $650. 
D) $675.

Question 14

Figure 7-6  
-Refer to Figure 7-6.At the equilibrium price,consumer surplus is

Accepted Answer

A) $1,600. 
B) $800. 
C) $1,400. 
D) $700. 
A) $1,600. 
B) $800. 
C) $1,400. 
D) $700.

Question 15

Dallas buys strawberries,and he would be willing to pay more than he now pays.Suppose that Dallas has a change in his tastes such that he values strawberries more than before.If the market price is the same as before,then

Accepted Answer

A) Dallas's consumer surplus would be unaffected. 
B) Dallas's consumer surplus would increase. 
C) Dallas's consumer surplus would decrease. 
D) Dallas would be wise to buy fewer strawberries than before. 
A) Dallas's consumer surplus would be unaffected. 
B) Dallas's consumer surplus would increase. 
C) Dallas's consumer surplus would decrease. 
D) Dallas would be wise to buy fewer strawberries than before.

Question 16

Suppose Brent,Callie,and Danielle each purchase a particular type of electric pencil sharpener at a price of $20.Brent's willingness to pay was $22,Callie's willingness to pay was $25,and Danielle's willingness to pay was $30.Which of the following statements is correct?

Accepted Answer

A) Had the price of the pencil sharpener been $24 rather than $20,only Danielle would have been a buyer. 
B) Brent's consumer surplus is the smallest of the three individual consumer surpluses. 
C) For the three individuals together,consumer surplus amounts to $60. 
D) The fact that all three individuals paid $20 for the same type of pencil sharpener indicates that each one placed the same value on that pencil sharpener. 
A) Had the price of the pencil sharpener been $24 rather than $20,only Danielle would have been a buyer. 
B) Brent's consumer surplus is the smallest of the three individual consumer surpluses. 
C) For the three individuals together,consumer surplus amounts to $60. 
D) The fact that all three individuals paid $20 for the same type of pencil sharpener indicates that each one placed the same value on that pencil sharpener.

Question 17

Billie Jo values a stainless steel dishwasher for her new house at $500,but she succeeds in buying one for $425.Billie Jo's willingness to pay for the dishwasher is

Accepted Answer

A) $150. 
B) $425. 
C) $500. 
D) $850. 
A) $150. 
B) $425. 
C) $500. 
D) $850.

Question 18

Pat bought a new car for $15,500 but was willing to pay $24,000.The consumer surplus is

Accepted Answer

A) $8,500. 
B) $15,500. 
C) $24,000. 
D) $39,500. 
A) $8,500. 
B) $15,500. 
C) $24,000. 
D) $39,500.

Question 19

Suppose the market demand curve for a good passes through the point (quantity demanded = 100,price = $25).If there are five buyers in the market,then

Accepted Answer

A) the marginal buyer's willingness to pay for the 100th unit of the good is $25. 
B) the sum of the five buyers' willingness to pay for the 100th unit of the good is $25. 
C) the average of the five buyers' willingness to pay for the 100th unit of the good is $25. 
D) all of the five buyers are willing to pay at least $25 for the 100th unit of the good. 
A) the marginal buyer's willingness to pay for the 100th unit of the good is $25. 
B) the sum of the five buyers' willingness to pay for the 100th unit of the good is $25. 
C) the average of the five buyers' willingness to pay for the 100th unit of the good is $25. 
D) all of the five buyers are willing to pay at least $25 for the 100th unit of the good.

Question 20

Brock is willing to pay $400 for a new suit,but he is able to buy the suit for $250.His consumer surplus is

Accepted Answer

A) $650. 
B) $150. 
C) $250. 
D) $400. 
A) $650. 
B) $150. 
C) $250. 
D) $400.

Exam 7: Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumer surplus is the

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?

Ray buys a new tractor for $118,000.He receives consumer surplus of $13,000 on his purchase.Ray's willingness to pay is

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,

Figure 7-3 -Refer to Figure 7-3.When the price is P1,consumer surplus is

Bob purchases a book,and his consumer surplus is $3.If Bob is willing to pay $8 for the book,then the price of the book must be

Suppose Katie,Kendra,and Kristen each purchase a particular type of cell phone at a price of $80.Katie's willingness to pay was $100,Kendra's willingness to pay was $95,and Kristen's willingness to pay was $80.Which of the following statements is correct?

Janine would be willing to pay $50 to see Les Misérables,but she buys a ticket for only $30.Janine values the performance at

Consumer surplus is

Figure 7-4 -Refer to Figure 7-4.Which area represents the increase in consumer surplus when the price falls from P1 to P2?

Figure 7-1 -Refer to Figure 7-1.If the price of the good is $250,then consumer surplus amounts to

Figure 7-8 -Refer to Figure 7-8.If the government imposes a price floor of $100 in this market,then consumer surplus will decrease by

Figure 7-6 -Refer to Figure 7-6.At the equilibrium price,consumer surplus is

Dallas buys strawberries,and he would be willing to pay more than he now pays.Suppose that Dallas has a change in his tastes such that he values strawberries more than before.If the market price is the same as before,then

Suppose Brent,Callie,and Danielle each purchase a particular type of electric pencil sharpener at a price of $20.Brent's willingness to pay was $22,Callie's willingness to pay was $25,and Danielle's willingness to pay was $30.Which of the following statements is correct?

Billie Jo values a stainless steel dishwasher for her new house at $500,but she succeeds in buying one for $425.Billie Jo's willingness to pay for the dishwasher is

Pat bought a new car for $15,500 but was willing to pay $24,000.The consumer surplus is

Suppose the market demand curve for a good passes through the point (quantity demanded = 100,price = $25).If there are five buyers in the market,then

Brock is willing to pay $400 for a new suit,but he is able to buy the suit for $250.His consumer surplus is

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A

Application International Trade: Part B