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

Table 7-5 For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day. -Refer to Table 7-5. Who experiences the largest loss of consumer surplus when the price of an orange increases from $0.70 to $1.40?

Externalities are

As a result of a decrease in price,

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

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

Laissez-faire is a French expression which literally means

Figure 7-4 -Refer to Figure 7-4. Which area represents consumer surplus at a price of P2?

Ronnie operates a lawn-care service. On each day, the cost of mowing the first lawn is $15, the cost of mowing the second lawn is $25, and the cost of mowing the third lawn is $40. His producer surplus on the first three lawns of the day is $100. If Ronnie charges all customers the same price for lawn mowing, that price is

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 you have two (essentially) identical tickets that you sell to the group in an auction, what will be the selling price for each ticket?

Figure 7-8 -Refer to Figure 7-8. If the government imposes a price ceiling of $80 in this market, then, assuming those with the highest willingness to pay purchase the good, consumer surplus will be

Figure 7-27 -Refer to Figure 7-27. Sellers whose costs are greater than the equilibrium price are represented by segment

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

Table 7-11 The following table represents the costs of five possible sellers. -Refer to Table 7-11. If the price is $1,l50, who would be willing to supply the product?

Which of the following will cause an increase in producer surplus?

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,

Table 7-7 -Refer to Table 7-7. You have an extra ticket to the Midwest Regional Sweet 16 game in the men's NCAA basketball tournament. The table shows the willingness to pay of the four potential buyers in the market for a ticket to the game. You hold an auction to sell the ticket. Michael bids $410 for the ticket, and you sell him the ticket. What is his consumer surplus?

Figure 7-22 -Refer to Figure 7-22. At the equilibrium price, total surplus is

Suppose the demand for peaches decreases. What will happen to producer surplus in the market for peaches?

Table 7-17 -Refer to Table 7-17. Both the demand curve and the supply curve are straight lines. At equilibrium, consumer surplus is

Which of the following is correct?