Question 1

Table 7-6
 
-Refer to Table 7-6.You have two 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 hold an auction to sell the two tickets.Michael and Earvin each offer to pay $360 for a ticket,and you sell them the two tickets.What is the total consumer surplus in the market?

Accepted Answer

A)   $720
B)   $180
C)   $140
D)   $40E) A) and B)
F) A) and C)

Question 2

Table 7-8
The only four producers in a market have the following costs:
 
-Refer to Table 7-8.If Evan,Selena,Angie,and Kris sell the good,and the resulting producer surplus is $700,then the price must have been

Accepted Answer

A)   $200.
B)   $300.
C)   $500.
D)   $700.E) All of the above
F) C) and D)

Question 3

Table 7-8
The only four producers in a market have the following costs:
 
-Refer to Table 7-8.If the sellers bid against each other for the right to sell the good to a consumer,then the good will sell for

Accepted Answer

A)   $50 or slightly more.
B)   $100 or slightly less.
C)   $150 or slightly less.
D)   $200 or slightly more.E) A) and B)
F) A) and C)

Question 4

Table 7-11
 
-Refer to Table 7-11.The equilibrium price is

Accepted Answer

A)   $10.00.
B)   $8.00.
C)   $6.00.
D)   $4.00.E) B) and D)
F) All of the above

Question 5

If Gina sells a shirt for $40,and her producer surplus from the sale is $32,her cost must have been

Accepted Answer

A)   $72.
B)   $32.
C)   $8.
D)   We would have to know the consumer surplus in order to make this determination.E) None of the above
F) A) and B)

Question 6

The marginal seller is the seller who

Accepted Answer

A)   cannot compete with the other sellers in the market.
B)   would leave the market first if the price were any lower.
C)   can produce at the lowest cost.
D)   has the largest producer surplus.E) A) and B)
F) A) and C)

Question 7

If the current allocation of resources in the market for wallpaper is efficient,then it must be the case that

Accepted Answer

A)   producer surplus equals consumer surplus in the market for wallpaper.
B)   the market for wallpaper is in equilibrium.
C)   on the last unit of wallpaper that was produced and sold, the value to buyers exceeded the cost to sellers.
D)   All of the above are correct.E) A) and B)
F) All of the above

Question 8

If the price a consumer pays for a product is equal to a consumer's willingness to pay,then the consumer surplus relevant to that purchase is

Accepted Answer

A)   zero.
B)   negative, and the consumer would not purchase the product.
C)   positive, and the consumer would purchase the product.
D)   There is not enough information given to answer this question.E) All of the above
F) A) and C)

Question 9

Consumer surplus is a good measure of economic welfare if policymakers want to

Accepted Answer

A)   maximize total benefit.
B)   minimize deadweight loss.
C)   respect the preferences of sellers.
D)   respect the preferences of buyers.E) A) and B)
F) B) and C)

Question 10

If producing a soccer ball costs Jake $5,and he sells it for $40,his producer surplus is $35.

Accepted Answer

A) True 
 B)False

Question 11

All else equal,an increase in supply will cause an increase in consumer surplus.

Accepted Answer

A) True 
 B)False

Question 12

Inefficiency exists in an economy when a good is

Accepted Answer

A)   being produced with less than all available resources.
B)   not distributed fairly among buyers.
C)   not being produced by the lowest-cost producers.
D)   being consumed by buyers who value it most highly.E) A) and B)
F) A) and C)

Question 13

Cameron visits a sporting goods store to buy a new set of golf clubs.He is willing to pay $750 for the clubs but buys them on sale for $575.Cameron's consumer surplus from the purchase is

Accepted Answer

A)   $175.
B)   $575.
C)   $750.
D)   $1,325.E) A) and D)
F) B) and D)

Question 14

The 2005 Boston Globe article discussing ticket scalping points out that the price people will pay for tickets will rise when

Accepted Answer

A)   supply and demand are both limited.
B)   supply is limited and demand is not limited.
C)   supply is limited and demand is not limited
D)   supply and demand are both not limited.E) C) and D)
F) B) and D)

Question 15

Figure 7-17
 
-Refer to Figure 7-17.When the price is P1,area B represents

Accepted Answer

A)   total surplus.
B)   producer surplus.
C)   consumer surplus.
D)   profits.E) None of the above
F) C) and D)

Question 16

Figure 7-15
 
-Refer to Figure 7-15.At the equilibrium price,total surplus is

Accepted Answer

A)   $150.
B)   $200.
C)   $250.
D)   $300.E) A) and B)
F) A) and C)

Question 17

Table 7-9
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
 
-Refer to Table 7-9.You wish to purchase 10 piano lessons for yourself and for your brother,so you take bids from each of the sellers.You will take lessons at the same time,so one teacher cannot provide lessons to both of you.You must pay the same price for both sets of lessons,and you will not accept a bid below a seller's cost because you are concerned that the seller will not provide all 10 lessons.What bid will you accept?

Accepted Answer

A)   $351
B)   $349
C)   $201
D)   $199E) A) and B)
F) A) and C)

Question 18

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 the price is $20,then consumer surplus in the market is

Accepted Answer

A)   $20, and Wilbur and Ming-la purchase the good.
B)   $45, and Carlos and Quilana purchase the good.
C)   $45, and Quilana, Wilbur, and Ming-la purchase the good.
D)   $55, and Carlos, Wilbur, and Ming-la purchase the good.E) A) and B)
F) A) and C)

Question 19

Consumer surplus is equal to the

Accepted Answer

A)   Value to buyers - Amount paid by buyers.
B)   Amount paid by buyers - Costs of sellers.
C)   Value to buyers - Costs of sellers.
D)   Value to buyers - Willingness to pay of buyers.E) B) and C)
F) C) and D)

Question 20

A buyer is willing to buy a product at a price greater than or equal to his willingness to pay,but would refuse to buy a product at a price less than his willingness to pay.

Accepted Answer

A) True 
 B)False

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

A buyer is willing to buy a product at a price greater than or equal to his willingness to pay,but would refuse to buy a product at a price less than his willingness to pay.

Correct Answer
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If the price a consumer pays for a product is equal to a consumer's willingness to pay,then the consumer surplus relevant to that purchase is

Correct Answer
verified

If the current allocation of resources in the market for wallpaper is efficient,then it must be the case that

Correct Answer
verified

Figure 7-17 -Refer to Figure 7-17.When the price is P1,area B represents

Correct Answer
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Table 7-8 The only four producers in a market have the following costs: -Refer to Table 7-8.If Evan,Selena,Angie,and Kris sell the good,and the resulting producer surplus is $700,then the price must have been

Correct Answer
verified

If producing a soccer ball costs Jake $5,and he sells it for $40,his producer surplus is $35.

Correct Answer
verified

The marginal seller is the seller who

Correct Answer
verified

Inefficiency exists in an economy when a good is

Correct Answer
verified

Consumer surplus is equal to the

Correct Answer
verified

Consumer surplus is a good measure of economic welfare if policymakers want to

Correct Answer
verified

If Gina sells a shirt for $40,and her producer surplus from the sale is $32,her cost must have been

Correct Answer
verified

Figure 7-15 -Refer to Figure 7-15.At the equilibrium price,total surplus is

Correct Answer
verified

Table 7-11 -Refer to Table 7-11.The equilibrium price is

Correct Answer
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Cameron visits a sporting goods store to buy a new set of golf clubs.He is willing to pay $750 for the clubs but buys them on sale for $575.Cameron's consumer surplus from the purchase is

Correct Answer
verified

Table 7-8 The only four producers in a market have the following costs: -Refer to Table 7-8.If the sellers bid against each other for the right to sell the good to a consumer,then the good will sell for

Correct Answer
verified

The 2005 Boston Globe article discussing ticket scalping points out that the price people will pay for tickets will rise when

Correct Answer
verified

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 the price is $20,then consumer surplus in the market is

Correct Answer
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All else equal,an increase in supply will cause an increase in consumer surplus.

Correct Answer
verified

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

A buyer is willing to buy a product at a price greater than or equal to his willingness to pay,but would refuse to buy a product at a price less than his willingness to pay.

Correct AnswerverifiedShow Answer

If the price a consumer pays for a product is equal to a consumer's willingness to pay,then the consumer surplus relevant to that purchase is

Correct AnswerverifiedShow Answer

If the current allocation of resources in the market for wallpaper is efficient,then it must be the case that

Correct AnswerverifiedShow Answer

Figure 7-17 -Refer to Figure 7-17.When the price is P1,area B represents

Correct AnswerverifiedShow Answer

Table 7-8 The only four producers in a market have the following costs: -Refer to Table 7-8.If Evan,Selena,Angie,and Kris sell the good,and the resulting producer surplus is $700,then the price must have been

Correct AnswerverifiedShow Answer

If producing a soccer ball costs Jake $5,and he sells it for $40,his producer surplus is $35.

Correct AnswerverifiedShow Answer

The marginal seller is the seller who

Correct AnswerverifiedShow Answer

Inefficiency exists in an economy when a good is

Correct AnswerverifiedShow Answer

Consumer surplus is equal to the

Correct AnswerverifiedShow Answer

Consumer surplus is a good measure of economic welfare if policymakers want to

Correct AnswerverifiedShow Answer

If Gina sells a shirt for $40,and her producer surplus from the sale is $32,her cost must have been

Correct AnswerverifiedShow Answer

Figure 7-15 -Refer to Figure 7-15.At the equilibrium price,total surplus is

Correct AnswerverifiedShow Answer

Table 7-11 -Refer to Table 7-11.The equilibrium price is

Correct AnswerverifiedShow Answer

Cameron visits a sporting goods store to buy a new set of golf clubs.He is willing to pay $750 for the clubs but buys them on sale for $575.Cameron's consumer surplus from the purchase is

Correct AnswerverifiedShow Answer

Table 7-8 The only four producers in a market have the following costs: -Refer to Table 7-8.If the sellers bid against each other for the right to sell the good to a consumer,then the good will sell for

Correct AnswerverifiedShow Answer

The 2005 Boston Globe article discussing ticket scalping points out that the price people will pay for tickets will rise when

Correct AnswerverifiedShow Answer

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 the price is $20,then consumer surplus in the market is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

All else equal,an increase in supply will cause an increase in consumer surplus.

Correct AnswerverifiedShow Answer

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