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

George produces cupcakes. His production cost is $10 per dozen. He sells the cupcakes for $16 per dozen. His producer surplus per dozen cupcakes is

What do economists call the highest amount a consumer will pay to purchase a good?

Denise values a stainless steel dishwasher for her new house at $500. The actual price of the dishwasher is $650. Denise

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

In order to calculate consumer surplus in a market, we need to know willingness to pay and price.

When markets fail, public policy can potentially remedy the problem and increase economic efficiency.

Table 7-7 -Refer to Table 7-7. You have four essentially identical extra tickets 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 offer to sell the tickets for $325. How many tickets do you sell, and what is the total consumer surplus in the market?

Consumer surplus

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

Inefficiency exists in an economy when a good is

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

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. If the market price of an orange is $0.40, then

Table 7-3 The only four consumers in a market have the following willingness to pay for a good: -Refer to Table 7-3. If there is only one unit of the good and if the buyers bid against each other for the right to purchase it, then the consumer surplus will be

Motor oil and gasoline are complements. If the price of motor oil increases, consumer surplus in the gasoline market

The consumption of water by local residents that may include pesticide runoff from local farmers' fields is an example of

In a market, the marginal buyer is the buyer

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

Table 7-1 -Refer to Table 7-1. If the price of the product is $122, then the total consumer surplus is

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. If the market price of an orange is $0.70, then the market quantity of oranges demanded per day is

Market failure is the inability of