Deck 5: Efficiency

Question 1

At prices above a consumers' reservation price:

A)the opportunity cost is greater than the benefit from having the good.
B)the opportunity cost is less than the benefit from having the good.
C)the buyer will purchase the good.
D)None of these is true.

Answer 1

the opportunity cost is greater than the benefit from having the good.

Question 2

Surplus is:

A)the difference between the price at which a buyer or seller would be willing to trade and the actual price.
B)the difference between the willingness to pay and the actual price paid.
C)the difference between the willingness to sell and the actual price accepted.
D)All of these are true.

Answer 2

All of these are true.

Question 3

If Claire's reservation price on a sweater is $37,which of the following prices would she have to observe in the market in order to buy a sweater?

A)$37.00
B)$37.01
C)$38.00
D)Claire would not buy a sweater at any of these prices.

Answer 3

$37.00

Question 4

Each seller's opportunity costs are:

A)determined monetarily,which is why they can never be zero.
B)determined by a number of factors,none of which is monetary.
C)determined by a number of factors,including monetary considerations.
D)None of these is true.

Question 5

A buyer always wants to:

A)buy for a price that is as low as possible,but never higher than his maximum.
B)buy for a price that is as high as possible,but never higher than his maximum.
C)buy for a price that is as low as possible,but never lower than his minimum.
D)buy for a price that is as high as possible,but never lower than his minimum.

Question 6

The willingness to pay of buyers' in a market:

A)is represented by the demand curve.
B)is represented by the supply curve.
C)explains why the demand curve is bowed-out.
D)explains why the demand curve is bowed-in.

Question 7

A consumer's willingness to pay:

A)is the maximum price that a buyer would be willing to pay for a good or service.
B)is the minimum price that a buyer would be willing to pay for a good or service.
C)is their reserved maximum bid-price.
D)must always equal the seller's willingness to sell.

Question 8

The maximum price that a buyer would be willing to pay for a good or service is also called:

A)the reservation price.
B)the buyer-max price.
C)the reserved max price.
D)None of these terms is used.

Question 9

A seller's willingness to sell:

A)is the maximum price that a seller is willing to accept in exchange for a good or service.
B)is the minimum price that a seller is willing to accept in exchange for a good or service.
C)is their reserved minimum bid-price.
D)must always equal the buyer's willingness to buy.

Question 10

In economics,the concept of surplus:

A)measures the benefit that people receive when they buy something for less than they would have been willing to pay.
B)measures the benefit that people receive when they sell something for more than they would have been willing to accept.
C)is the best way to look at the benefits people receive from successful transactions.
D)All of these are true.

Question 11

Surplus is:

A)a way of measuring who benefits from transactions and by how much.
B)the difference between the price the buyer would have paid and the actual price paid.
C)the difference between the price the seller would have accepted and the actual sell price.
D)All of these statements are true.

Question 12

If Thelma's willingness to sell her homemade fudge is $4,then at which of the following prices would Thelma sell her fudge?

A)$2
B)$3.99
C)$4.01
D)Thelma would not sell her fudge at any of these prices.

Question 13

Which of the following prices could represent Sally's willingness to pay for a pair of shoes if she bought them for $45?

A)$15.00
B)$25.00
C)$44.99
D)$55.00

Question 14

Willingness to pay represents:

A)the point at which the benefit that a person will get from a good is equal to the benefit of spending the money on another alternative.
B)the opportunity cost of a good.
C)the buyer's reservation price.
D)All of these represent willingness to pay.

Question 15

If Sam's opportunity cost of a sweater is $37,which of the following prices would he have to observe in the market in order to sell a sweater?

A)$37
B)$37.01
C)$50
D)Sam would sell a sweater at any of these prices.

Question 16

At prices below a consumer's maximum willingness to pay:

A)the buyer will participate in the market because the opportunity cost is less than the benefit from having the good.
B)the buyer will participate in the market because the opportunity cost is more than the benefit from having the good.
C)the buyer will not participate in the market because the opportunity cost is less than the benefit from having the good.
D)the buyer will not participate in the market because the opportunity cost is more than the benefit from having the good.

Question 17

The concept of surplus can:

A)show who loses from international trade.
B)show who benefits from a tax.
C)show who loses from minimum wage.
D)show any of these.

Question 18

If Billy's reservation price on a snowboard is $250,how many snowboards would he buy if the market price of snowboards is $500?

A)0
B)1
C)2
D)The amount of snowboards purchased would depend on Billy's income.

Question 19

Which of the following prices could represent Eli's willingness to pay for a baseball glove if he observed the market price of $43 and decided not buy one?

A)$37
B)$45
C)$50
D)None of these could represent Eli's willingness to pay.

Question 20

A seller always wants to:

A)sell for a price that is as high as possible,but never lower than his minimum.
B)sell for a price that is as low as possible,but never higher than his maximum.
C)sell for a price that is as high as possible,but never higher than his maximum.
D)sell for a price that is as low as possible,but never lower than his minimum.

Question 21

A market has four individuals considering buying a grill for his backyard.Further assume that grills come in only one size and model.Abe considers himself a grill-master,and finds a grill a necessity,so he is willing to pay $400 for a grill.Butch is a meat-lover,honing his grilling skills,and is willing to pay $350 for a grill.Collin just met the girl of his dreams,and she loves a good grilled steak,so in his effort to impress her he is willing to pay $320 for a grill.Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp,so he is willing to pay $200 for a grill.
If the market price of grills increases from $300 to $320,given the scenario described:

A)Collin would drop out of the market.
B)Collin's surplus would decrease the least.
C)Collin is the only consumer who would be affected in terms of surplus.
D)None of these is true.

Question 22

A market has four individuals considering buying a grill for his backyard.Further assume that grills come in only one size and model.Abe considers himself a grill-master,and finds a grill a necessity,so he is willing to pay $400 for a grill.Butch is a meat-lover,honing his grilling skills,and is willing to pay $350 for a grill.Collin just met the girl of his dreams,and she loves a good grilled steak,so in his effort to impress her he is willing to pay $320 for a grill.Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp,so he is willing to pay $200 for a grill.
Given the scenario described,if the market price of grills is $320,who participates in the market?

A)Only Abe,Butch,and Collin participate.
B)Only Collin and Daniel participate.
C)Only Abe and Butch participate.
D)Only Daniel participates.

Question 23

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers increased from $7 to $11:

A)producer participation in the market would increase.
B)only Bob's Hardware would still lose surplus.
C)both Bob's Hardware and Lace Hardware would lose surplus.
D)House Depot is the only producer that will gain surplus.

Question 24

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers was $13,then total producer surplus would be:

A)$9.
B)$30.
C)$17.
D)$7.

Question 25

A market has four individuals considering buying a grill for his backyard.Further assume that grills come in only one size and model.Abe considers himself a grill-master,and finds a grill a necessity,so he is willing to pay $400 for a grill.Butch is a meat-lover,honing his grilling skills,and is willing to pay $350 for a grill.Collin just met the girl of his dreams,and she loves a good grilled steak,so in his effort to impress her he is willing to pay $320 for a grill.Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp,so he is willing to pay $200 for a grill.
If the market price of grills is $320,given the scenario described,Abe's consumer surplus would be:

A)$400.
B)$350.
C)$320.
D)$80.

Question 26

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers was $10,then:

A)only House Depot would gain surplus by supplying hammers to the market.
B)only House Depot and Lace Hardware would gain surplus by supplying hammers to the market.
C)House Depot,Lace Hardware,and Bob's Hardware would all supply hammers to the market,but Bob's would lose surplus.
D)only House Depot and Bob's Hardware would supply hammers to the market.

Question 27

Surplus is:

A)a better measure of the value that buyers and sellers get from participating in a market than price itself.
B)maximized for individuals whose reservation price equals the market price.
C)negative for those who do not participate in a market.
D)All of these are true.

Question 28

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers decreased from $17 to $12:

A)producer participation in the market would increase.
B)producer participation in the market would decrease.
C)producer participation in the market would not be affected.
D)total producer surplus would remain unchanged.

Question 29

A market has four individuals considering buying a grill for his backyard.Further assume that grills come in only one size and model.Abe considers himself a grill-master,and finds a grill a necessity,so he is willing to pay $400 for a grill.Butch is a meat-lover,honing his grilling skills,and is willing to pay $350 for a grill.Collin just met the girl of his dreams,and she loves a good grilled steak,so in his effort to impress her he is willing to pay $320 for a grill.Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp,so he is willing to pay $200 for a grill.
If the market price of grills is $300,given the scenario described,the total consumer surplus would be:

A)$170.
B)$1,070.
C)$200.
D)None of these is true.

Question 30

A market has four individuals considering buying a grill for his backyard.Further assume that grills come in only one size and model.Abe considers himself a grill-master,and finds a grill a necessity,so he is willing to pay $400 for a grill.Butch is a meat-lover,honing his grilling skills,and is willing to pay $350 for a grill.Collin just met the girl of his dreams,and she loves a good grilled steak,so in his effort to impress her he is willing to pay $320 for a grill.Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp,so he is willing to pay $200 for a grill.
If the market price of grills falls from $375 to $330,given the scenario described,which of the following can be said?

A)Butch will join the market,but receive no consumer surplus.
B)Butch and Collin will join the market,and together will receive$30 in consumer surplus.
C)Abe will experience a decrease in consumer surplus of $45.
D)Abe will experience an increase in consumer surplus of $45.

Question 31

When someone's willingness to pay is the same as the actual price paid for an item:

A)the individual will not purchase the item.
B)the individual's surplus is zero.
C)surplus cannot be maximized.
D)All of these are true.

Question 32

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers was $12,then total producer surplus would be:

A)$7.
B)$9.
C)$17.
D)$30.

Question 33

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers decreased from $15 to $11:

A)total producer surplus would fall by $4.
B)producer surplus for each producer falls by $4.
C)House Depot's producer surplus falls by $4.
D)total producer surplus falls by $8.

Question 34

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers decreased from $15 to $13,which of the following can be said with certainty?

A)Producer participation in the market would decrease.
B)Total producer surplus would decrease.
C)Only Bob's Hardware will experience a drop in producer surplus.
D)Producer participation in the market will not be affected.

Question 35

A market has four individuals considering buying a grill for his backyard.Further assume that grills come in only one size and model.Abe considers himself a grill-master,and finds a grill a necessity,so he is willing to pay $400 for a grill.Butch is a meat-lover,honing his grilling skills,and is willing to pay $350 for a grill.Collin just met the girl of his dreams,and she loves a good grilled steak,so in his effort to impress her he is willing to pay $320 for a grill.Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp,so he is willing to pay $200 for a grill.
Given the scenario described,if the market price of grills falls from $395 to $340,then we can say:

A)Abe's consumer surplus increases from $5 to $60,and total consumer surplus increases from $5 to $70.
B)Abe's consumer surplus decreases from $60 to $5,and total consumer surplus decreases from $70 to $5.
C)Collin's consumer surplus increases from $0 to $20,and total consumer surplus increases from $5 to 70.
D)Butch's consumer surplus decreases from $10 to $0,and total consumer surplus increases from $10 to $80.

Question 36

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers decreased from $15 to $10:

A)total producer surplus falls by $5.
B)producer surplus for each producer falls by $5.
C)Bob's Hardware no longer sells hammers.
D)total producer surplus falls by $15.

Question 37

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers decreased from $13 to $11:

A)total producer surplus would decrease from $9 to $5.
B)total producer surplus would increase from $5 to $9.
C)total producer surplus would decrease from $30 to $17.
D)total producer surplus would remain unchanged.

Question 38

A market has four individuals considering buying a grill for his backyard.Further assume that grills come in only one size and model.Abe considers himself a grill-master,and finds a grill a necessity,so he is willing to pay $400 for a grill.Butch is a meat-lover,honing his grilling skills,and is willing to pay $350 for a grill.Collin just met the girl of his dreams,and she loves a good grilled steak,so in his effort to impress her he is willing to pay $320 for a grill.Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp,so he is willing to pay $200 for a grill.
If the market price of grills is $350,given the scenario described,total consumer surplus would be:

A)$50.
B)$750.
C)$400.
D)$870.

Question 39

A market has four individuals considering buying a grill for his backyard.Further assume that grills come in only one size and model.Abe considers himself a grill-master,and finds a grill a necessity,so he is willing to pay $400 for a grill.Butch is a meat-lover,honing his grilling skills,and is willing to pay $350 for a grill.Collin just met the girl of his dreams,and she loves a good grilled steak,so in his effort to impress her he is willing to pay $320 for a grill.Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp,so he is willing to pay $200 for a grill.
If the market price of grills increases from $310 to $350,given the scenario described:

A)total consumer surplus would rise.
B)total consumer surplus would fall.
C)Collin and Butch would experience a decrease in consumer surplus,but Abe's consumer surplus would rise.
D)Collin would experience a decrease in consumer surplus,but Abe and Butch would experience a rise in consumer surplus.

Question 40

When Bob's willingness to pay for a cup of coffee is $1,and the price of a cup of coffee is $1:

A)Bob is indifferent about purchasing the coffee.
B)Bob will get no surplus by purchasing the coffee.
C)Bob will get the same surplus whether he purchases the coffee or not.
D)All of these are true.

Question 41

Total surplus:

A)is producer and consumer surplus combined.
B)is producer surplus minus consumer surplus.
C)is consumer surplus minus producer surplus.
D)None of these is true.

Question 42

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers increased from $9 to $12,total producer surplus would be:

A)$3.
B)$6.
C)$7.
D)$17.

Question 43

When a market is efficient,

A)there is no exchange that can make anyone better off without someone becoming worse off.
B)a central planner must be involved.
C)only increased prices can benefit those involved.
D)None of these is true.

Question 44

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers increased from $8 to $12,total producer surplus would:

A)increase from $8 to $12.
B)increase by $4 for each producer.
C)increase by $4 for House Depot.
D)All of these statements are true.

Question 45

What is the producer surplus earned by a seller whose willingness to sell is $10 below the market price of a good?

A)$0
B)$10
C)(P* - $10)
D)None of these is correct.

Question 46

Total surplus:

A)can never be negative.
B)is always zero in an efficient market.
C)can be negative when the market is not in equilibrium.
D)None of these is true.

Question 47

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers increased from $8 to $11:

A)total producer surplus would increase to $5.
B)total producer surplus would decrease to $1.
C)total producer surplus would increase to $17.
D)total producer surplus would decrease to $7.

Question 48

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers increased from $6 to $8:

A)producer participation in the market would increase.
B)producer participation in the market would decrease.
C)producer participation in the market would remain unchanged.
D)total producer surplus would increase by $2.

Question 49

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers increased from $8 to $14,total producer surplus would:

A)increase from $8 to $14.
B)increase from $1 to $12.
C)decrease from $14 to $8.
D)increase from $7 to $30.

Question 50

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers increased from $8 to $11:

A)total producer surplus would increase by $3.
B)total producer surplus would increase by $6.
C)total producer surplus would increase by $9.
D)total producer surplus would increase by $4.

Question 51

When the market price is set below the equilibrium price:

A)efficiency does not occur.
B)total surplus is not maximized.
C)producer surplus is decreased.
D)All of these are true.

Question 52

Total surplus:

A)can never be zero.
B)can never fall below zero.
C)is always above zero.
D)None of these is true.

Question 53

When the market price is set above the equilibrium price:

A)efficiency does not occur.
B)total surplus is not maximized.
C)consumer surplus is decreased.
D)All of these are true.

Question 54

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers increased from $9 to $13:

A)House Depot's producer surplus would increase by $4.
B)Lace Hardware's producer surplus would increase by $3.
C)Bob's Hardware's producer surplus would remain unchanged.
D)All of these statements are true.

Question 55

When a market is in equilibrium,

A)consumer surplus is minimized.
B)producer surplus is minimized.
C)total surplus is maximized.
D)All of these are true.

Question 56

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers increased from $6 to $7:

A)total producer surplus would increase.
B)total producer surplus would remain unchanged.
C)total producer surplus would decrease.
D)Total producer surplus cannot be determined with the information given.

Question 57

What consumer surplus is received by someone whose willingness to pay is $35 below the market price of a good?

A)$0
B)$35
C)($35 x P*)
D)None of these is correct.

Question 58

When a market is in equilibrium,

A)total surplus is maximized.
B)the market is efficient.
C)total well being of all participants in the market is as high as possible.
D)All of these are true.

Question 59

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers increased from $9 to $13:

A)producer surplus would increase for each producer.
B)producer surplus would increase only for House Depot.
C)producer surplus would remain unchanged for Bob's Hardware.
D)producer surplus would increase by $4 for Lace Hardware.

Question 60

Efficient markets:

A)maximize total surplus.
B)can occur without a central planner.
C)occur when a market is in equilibrium.
D)All of these are true.

Question 61

Deadweight loss:

A)occurs when the market price is set above the equilibrium price.
B)occurs when the market price is set below the equilibrium price.
C)is the loss of total surplus that results when the quantity of a good that is bought and sold is below the market equilibrium quantity.
D)All of these are true.

Question 62

The loss of total surplus that results when the quantity of a good that is bought and sold is below the market equilibrium quantity:

A)is deadweight loss.
B)occurs in inefficient markets.
C)occurs when the market price is set above the equilibrium price.
D)All of these are true.

Question 63

Assume a market price gets set artificially high-that is,it gets set above the equilibrium price.This change means:

A)Every consumer loses surplus,and it all gets transferred to producers.
B)Some consumers drop out of the market,and those left lose some surplus.
C)Every producer gains surplus,due to the higher price now being charged.
D)None of these is true.

Question 64

Assume a market that has an equilibrium price of $8.If the market price is set at $7,consumer surplus:

A)rises for some because of the increased price.
B)decreases for some because of fewer transactions taking place.
C)Both of these statements are true.
D)Neither of these statements is true.

Question 65

Total surplus can be increased if:

A)new markets are created.
B)existing markets are improved.
C)markets get closer to equilibrium.
D)All of these can increase total surplus.

Question 66

When a market is not in equilibrium:

A)total surplus is not maximized.
B)there are no exchanges that can make some better off without someone becoming worse off.
C)the market is efficient.
D)All of these are true.

Question 67

Markets can be missing:

A)because public policy prevents the market from existing.
B)when the production of a particular good is banned.
C)because of a lack of accurate information between potential buyers and sellers.
D)All of these are true.

Question 68

Assume a market that has an equilibrium price of $5.If the market price is set at $9,producer surplus:

A)rises for some because of the increased price.
B)decreases for some because of fewer transactions taking place.
C)Both of these statements are true.
D)Neither of these statements is true.

Question 69

When a market is not in equilibrium:

A)total surplus can be increased by a change in market price.
B)the market is not efficient.
C)there are exchanges that can make some better off without someone becoming worse off.
D)All of these are true.

Question 70

Assume a market that has an equilibrium price of $7.If the market price is set at $3,which of the following is true?

A)Some surplus is transferred from consumers to producers,but total surplus falls.
B)All surplus is transferred from consumers to producers,and total surplus stays the same.
C)Some surplus is transferred from producers to consumers,but total surplus falls.
D)Some surplus is transferred from consumers to producers,causing total surplus to increase.

Question 71

Assume a market price gets set artificially low-that is,it gets set below the equilibrium price.This change means:

A)Every producer loses surplus,and it all gets transferred to consumers.
B)Some producers drop out of the market,and those left lose some surplus.
C)Every consumer gains surplus,due to the lower price now being charged.
D)None of these is true.

Question 72

The loss of total surplus that results when the quantity of a good that is bought and sold is below the market equilibrium quantity is called:

A)deadweight loss.
B)producer surplus.
C)consumer surplus.
D)total surplus.

Question 73

Markets can be missing if:

A)there is a lack of technology that would make the exchanges possible.
B)there is a ban on the sale of a particular good.
C)there is a lack of accurate information between potential buyers and sellers.
D)All of these are true.

Question 74

Deadweight loss:

A)occurs in markets that are inefficient.
B)occurs when markets are not in equilibrium.
C)is lost surplus due to less market transactions.
D)All of these are true.

Question 75

Deadweight loss:

A)creates efficiency in markets.
B)is the loss of total surplus that results when the quantity of a good that is bought and sold is below the market equilibrium quantity.
C)is the loss of total surplus that results when the quantity of a good that is bought and sold is above the market equilibrium quantity.
D)always occurs in markets.

Question 76

Assume a market that has an equilibrium price of $4.If the market price is set at $8,which of the following is true?

A)Some surplus is transferred from consumers to producers,but total surplus falls.
B)All surplus is transferred from consumers to producers,and total surplus stays the same.
C)Some surplus is transferred from producers to consumers,but total surplus falls.
D)Some surplus is transferred from consumers to producers,causing total surplus to increase.

Question 77

We say a market is "missing" when:

A)there is no place for potential buyers and sellers to exchange a particular good or service.
B)the quantity being exchanged is at or close to zero.
C)there is an absence of a well-functioning market,and total surplus is lower than it could be.
D)All of these are true.

Question 78

Markets can be missing:

A)because public policy taxes a market.
B)when the sale of a particular service is banned.
C)when miscommunication of information between buyers and sellers leads to the wrong equilibrium price.
D)All of these are true.

Question 79

Well being can be increased by:

A)policies that help people do business more effectively.
B)technologies that help people share more and better information.
C)increasing the availability of accurate information.
D)All of these are true.

Question 80

Creating a market that was previously "missing":

A)redistributes surplus from buyer to seller.
B)redistributes surplus from seller to buyer.
C)redistributes surplus from one market to the one that was previously missing.
D)creates more total surplus.