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

Table 7-13 The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality. -Refer to Table 7-13. You wish to purchase 10 piano lessons, so you take bids from each of the sellers. The bids are required to be rounded to the nearest dollar. You will not accept a bid below a seller's cost because you are concerned that the seller will not provide all 10 lessons. Your parents have given you $450 to spend on piano lessons. You believe that the sellers with higher opportunity costs offer higher quality lessons. You want the highest quality lessons that you can afford, but you can spend any remaining money on dinner with friends. From whom will you take lessons, and how much money will you spend?

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

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 price of Vanilla Coke is $6.90, who will purchase the good?

We can say that the allocation of resources is efficient if

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

If producing a soccer ball costs Jake $5, and he sells it for $40, his producer surplus is $45.

Steak and chicken are substitutes. A sharp reduction in the supply of steak would

Figure 7-15 -Refer to Figure 7-15. When the price falls from P2 to P1, which of the following would not be true?

Figure 7-24 -Refer to Figure 7-24. If 6 units of the good are produced and sold, then

Table 7-13 The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality. -Refer to Table 7-13. The equilibrium market price for 10 piano lessons is $300. What is the total producer surplus in the market?

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?

Figure 7-32 -Refer to Figure 7-32. At what price will total surplus be maximized in this market?

Figure 7-34 -Refer to Figure 7-34. Suppose there is initially a price ceiling set at $4 in this market. If the government removed the price ceiling, by how much would total producer surplus increase for those producers entering the market after the price ceiling is removed?

The marginal seller is the seller

Figure 7-23 -Refer to Figure 7-23. At equilibrium, producer surplus is represented by the area

Suppose your own demand curve for tomatoes slopes downward. Suppose also that, for the last tomato you bought this week, you paid a price exactly equal to your willingness to pay. Then

Which of the following will cause no change in producer surplus?

Figure 7-11 -Refer to Figure 7-11. If the supply curve is S and the demand curve shifts from D to D', what is the change in producer surplus?

Table 7-6 For each of three potential buyers of apples, the table displays the willingness to pay for the first three apples of the day. Assume Xavier, Yadier, and Zavi are the only three buyers of apples, and only three apples can be supplied per day. -Refer to Table 7-6. If the market price of an apple increases from $1.40 to $1.60, then consumer surplus

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