Question 1

If Darby values a soccer ball at $50, and she pays $40 for it, her consumer surplus is $90.

Accepted Answer

A) True 
 B)False

Question 2

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 3

Table 7-18
The following table shows the willingness to pay for a good for the only four consumers in a market.  
-Refer to Table 7-18. If the price of the good is $20, how many units will be demanded?

Accepted Answer

Three unit

Question 4

Figure 7-30  
-Refer to Figure 7-30. If the market equilibrium price falls from $120 to $80, how much is the increase in consumer surplus to the consumers who were initially in the market at the $120 price?

Accepted Answer

Consumer surplus inc

Question 5

If the government imposes a binding price floor in a market, then the consumer surplus in that market will increase.

Accepted Answer

A) True 
 B)False

Question 6

Producer surplus is

Accepted Answer

A)  measured using the demand curve for a good. 
B)  always a negative number for sellers in a competitive market. 
C)  the amount a seller is paid minus the cost of production. 
D)  the opportunity cost of production minus the cost of producing goods that go unsold. 
A)  measured using the demand curve for a good. 
B)  always a negative number for sellers in a competitive market. 
C)  the amount a seller is paid minus the cost of production. 
D)  the opportunity cost of production minus the cost of producing goods that go unsold.

Question 7

Figure 7-33  
-Refer to Figure 7-33. Suppose demand shifts such that consumers wish to purchase 12 fewer units at every price.
How much is total surplus in this market at the new equilibrium price?

Accepted Answer

Total surplus at the

Question 8

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 9

Producer surplus directly measures

Accepted Answer

A)  the well-being of society as a whole. 
B)  the well-being of buyers and sellers. 
C)  the well-being of sellers. 
D)  sellers' willingness to sell. 
A)  the well-being of society as a whole. 
B)  the well-being of buyers and sellers. 
C)  the well-being of sellers. 
D)  sellers' willingness to sell.

Question 10

Figure 7-33  
-Refer to Figure 7-33. Suppose demand shifts such that consumers wish to purchase 12 fewer units at every price.
How much is total producer surplus in this market at the new equilibrium price?

Accepted Answer

Total producer surpl

Question 11

Table 7-20  
-Refer to Table 7-20. How much is total surplus at the equilibrium price in this market?

Accepted Answer

Total surp

Question 12

Figure 7-33  
-Refer to Figure 7-33. Suppose demand shifts such that consumers wish to purchase 12 fewer units at every price.
How much is total consumer surplus in this market at the new equilibrium price?

Accepted Answer

Total consumer surpl

Question 13

Which of the following equations is valid?

Accepted Answer

A)  Consumer surplus = Total surplus - Cost to sellers 
B)  Producer surplus = Total surplus - Consumer surplus 
C)  Total surplus = Value to buyers - Amount paid by buyers 
D)  Total surplus = Amount received by sellers - Cost to sellers 
A)  Consumer surplus = Total surplus - Cost to sellers 
B)  Producer surplus = Total surplus - Consumer surplus 
C)  Total surplus = Value to buyers - Amount paid by buyers 
D)  Total surplus = Amount received by sellers - Cost to sellers

Question 14

Figure 7-18  
-Refer to Figure 7-18. Suppose the willingness to pay of the marginal buyer of the 3rd unit is $125. Then total surplus is maximized if

Accepted Answer

A)  1 unit of the good is produced and sold. 
B)  2 units of the good are produced and sold. 
C)  3 units of the good are produced and sold. 
D)  4 units of the good are produced and sold. 
A)  1 unit of the good is produced and sold. 
B)  2 units of the good are produced and sold. 
C)  3 units of the good are produced and sold. 
D)  4 units of the good are produced and sold.

Question 15

Figure 7-19  
-Refer to Figure 7-19. If the government imposes a price floor of $55 in this market, then total surplus will be

Accepted Answer

A)  $137.50. 
B)  $125.00. 
C)  $187.50. 
D)  $275.00. 
A)  $137.50. 
B)  $125.00. 
C)  $187.50. 
D)  $275.00.

Question 16

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

Accepted Answer

A)  $600. 
B)  $900. 
C)  $1,200. 
D)  $1,800. 
A)  $600. 
B)  $900. 
C)  $1,200. 
D)  $1,800.

Question 17

Table 7-17  
-Refer to Table 7-17. At a price of $2.00, total surplus is

Accepted Answer

A)  larger than it would be at the equilibrium price. 
B)  smaller than it would be at the equilibrium price. 
C)  the same as it would be at the equilibrium price. 
D)  There is insufficient information to make this determination. 
A)  larger than it would be at the equilibrium price. 
B)  smaller than it would be at the equilibrium price. 
C)  the same as it would be at the equilibrium price. 
D)  There is insufficient information to make this determination.

Question 18

Figure 7-22  
-Refer to Figure 7-22. If the price decreases from $80 to $70 due to a shift in the supply curve, consumer surplus increases by

Accepted Answer

A)  $250. 
B)  $750. 
C)  $1000. 
D)  $500. 
A)  $250. 
B)  $750. 
C)  $1000. 
D)  $500.

Question 19

Consumer surplus equals the

Accepted Answer

A)  value to buyers minus the amount paid by buyers. 
B)  value to buyers minus the cost to sellers. 
C)  amount received by sellers minus the cost to sellers. 
D)  amount received by sellers minus the amount paid by buyers. 
A)  value to buyers minus the amount paid by buyers. 
B)  value to buyers minus the cost to sellers. 
C)  amount received by sellers minus the cost to sellers. 
D)  amount received by sellers minus the amount paid by buyers.

Question 20

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.

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

If Darby values a soccer ball at $50, and she pays $40 for it, her consumer surplus is $90.

On a graph, consumer surplus is represented by the area

Table 7-18 The following table shows the willingness to pay for a good for the only four consumers in a market. -Refer to Table 7-18. If the price of the good is $20, how many units will be demanded?

Figure 7-30 -Refer to Figure 7-30. If the market equilibrium price falls from $120 to $80, how much is the increase in consumer surplus to the consumers who were initially in the market at the $120 price?

If the government imposes a binding price floor in a market, then the consumer surplus in that market will increase.

Producer surplus is

Figure 7-33 -Refer to Figure 7-33. Suppose demand shifts such that consumers wish to purchase 12 fewer units at every price. How much is total surplus in this market at the new equilibrium price?

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

Producer surplus directly measures

Figure 7-33 -Refer to Figure 7-33. Suppose demand shifts such that consumers wish to purchase 12 fewer units at every price. How much is total producer surplus in this market at the new equilibrium price?

Table 7-20 -Refer to Table 7-20. How much is total surplus at the equilibrium price in this market?

Figure 7-33 -Refer to Figure 7-33. Suppose demand shifts such that consumers wish to purchase 12 fewer units at every price. How much is total consumer surplus in this market at the new equilibrium price?

Which of the following equations is valid?

Figure 7-18 -Refer to Figure 7-18. Suppose the willingness to pay of the marginal buyer of the 3rd unit is $125. Then total surplus is maximized if

Figure 7-19 -Refer to Figure 7-19. If the government imposes a price floor of $55 in this market, then total surplus will be

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

Table 7-17 -Refer to Table 7-17. At a price of $2.00, total surplus is

Figure 7-22 -Refer to Figure 7-22. If the price decreases from $80 to $70 due to a shift in the supply curve, consumer surplus increases by

Consumer surplus equals the

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

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

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 of Microeconomics

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 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 Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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