Question 1

Producer surplus equals

Accepted Answer

A)  Value to buyers - Amount paid by buyers.
B)  Amount received by sellers - Costs of sellers.
C)  Value to buyers - Costs of sellers.
D)  Value to buyers - Amount paid by buyers + Amount received by sellers - Costs of sellers.E) A) and B)
F) None of the above

Question 2

Kristi and Rebecca sell lemonade on the corner.It costs them 7 cents to make each cup.On a certain day,they sell 40 cups.Their producer surplus for that day amounts to $19.20.Kristi & Rebecca sold each cup for

Accepted Answer

A)  31 cents.
B)  38 cents.
C)  45 cents.
D)  55 cents.E) A) and D)
F) None of the above

Question 3

ABC Company incurs a cost of 50 cents to produce a dozen eggs,while XYZ Company incurs a cost of 70 cents to produce a dozen eggs.Which of the following price increases would cause both companies to experience an increase in producer surplus?

Accepted Answer

A)  The price of a dozen eggs increases from 40 cents to 55 cents.
B)  The price of a dozen eggs increases from 55 cents to 70 cents.
C)  The price of a dozen eggs increases from 55 cents to 75 cents.
D)  All of these price increases would cause both companies to experience a loss in producer surplus.E) B) and C)
F) A) and D)

Question 4

David tunes pianos in his spare time for extra income.Buyers of his service are willing to pay $135 per tuning.One particular week,David is willing to tune the first piano for $115,the second piano for $125,the third piano for $140,and the fourth piano for $175.Assume David is rational in deciding how many pianos to tune.His producer surplus is

Accepted Answer

A)  $-15.
B)  $20.
C)  $30.
D)  $75.E) B) and C)
F) None of the above

Question 5

Figure 7-15 
-Refer to Figure 7-15.Suppose producer surplus is larger than C but smaller than A+B+C.The price of the good must be

Accepted Answer

A)  lower than P1.
B)  P1.
C)  between P1 and P2.
D)  higher than P2.E) None of the above
F) B) and C)

Question 6

Figure 7-13 
-Refer to Figure 7-13.If the equilibrium price rises from $60 to $120,what is the producer surplus to new producers in the market?

Accepted Answer

A)  $1,200
B)  $2,400
C)  $3,600
D)  $4,800E) B) and C)
F) A) and C)

Question 7

Figure 7-10 
-Refer to Figure 7-10.Which area represents producer surplus when the price is P1?

Accepted Answer

A)  BCG
B)  ACH
C)  ABGD
D)  DGHE) C) and D)
F) None of the above

Question 8

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.E) A) and B)
F) A) and C)

Question 9

Figure 7-15 
-Refer to Figure 7-15.When the price falls from P2 to P1,which of the following would not be true?

Accepted Answer

A)  The sellers who still sell the good are worse off because they now receive less.
B)  Some sellers leave the market because they are not willing to sell the good at the lower price.
C)  The total cost of what is now sold by sellers is actually higher than it was before the decrease in the price.
D)  Producer surplus would fall by area A + B.E) A) and B)
F) A) and C)

Question 10

A seller is willing to sell a product only if the seller receives a price that is at least as great as the

Accepted Answer

A)  seller's producer surplus.
B)  seller's cost of production.
C)  seller's profit.
D)  average willingness to pay of buyers of the product.E) A) and B)
F) A) and C)

Question 11

Figure 7-17 
-Refer to Figure 7-17.If the demand curve is D and the supply curve shifts left from S to S',what is the change in producer surplus when comparing the new equilibrium with the original equilibrium?

Accepted Answer

A)  Producer surplus increases by $225.
B)  Producer surplus increases by $675.
C)  Producer surplus decreases by $225.
D)  Producer surplus decreases by $675.E) A) and C)
F) C) and D)

Question 12

Justin builds fences for a living.Justin's out-of-pocket expenses (for wood,paint,etc. ) plus the value that he places on his own time amount to his

Accepted Answer

A)  producer surplus.
B)  producer deficit.
C)  cost of building fences.
D)  profit.E) A) and D)
F) A) and C)

Question 13

Figure 7-11 
-Refer to Figure 7-11.If the supply curve is S,the demand curve is D,and the equilibrium price is $100,what is the producer surplus?

Accepted Answer

A)  $625
B)  $1,250
C)  $2,500
D)  $5,000E) B) and D)
F) A) and B)

Question 14

Figure 7-11 
-Refer to Figure 7-11.If the demand curve is D and the supply curve shifts from S' to S,what is the change in producer surplus?

Accepted Answer

A)  Producer surplus increases by $625.
B)  Producer surplus increases by $1,875.
C)  Producer surplus decreases by $625.
D)  Producer surplus decreases by $1,875.E) C) and D)
F) All of the above

Question 15

Allen tutors in his spare time for extra income.Buyers of his service are willing to pay $40 per hour for as many hours Allen is willing to tutor.On a particular day,he is willing to tutor the first hour for $10,the second hour for $18,the third hour for $28,and the fourth hour for $40.Assume Allen is rational in deciding how many hours to tutor.His producer surplus is

Accepted Answer

A)  $40.
B)  $64.
C)  $12.
D)  $56.E) C) and D)
F) A) and B)

Question 16

Figure 7-11 
-Refer to Figure 7-11.If the supply curve is S and the demand curve shifts from D to D',what is the change in producer surplus?

Accepted Answer

A)  Producer surplus increases by $3,125.
B)  Producer surplus increases by $5,625.
C)  Producer surplus decreases by $3,125.
D)  Producer surplus decreases by $5,625.E) A) and C)
F) All of the above

Question 17

Figure 7-15 
-Refer to Figure 7-15.Area A represents

Accepted Answer

A)  producer surplus to new producers entering the market as the result of an increase in price from P1 to P2.
B)  the increase in consumer surplus that results from an upward-sloping supply curve.
C)  the increase in total surplus when sellers are willing and able to increase supply from Q1 to Q2.
D)  the increase in producer surplus to those producers already in the market when the price increases from P1 to P2.E) B) and D)
F) A) and C)

Question 18

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

Accepted Answer

A)  the imposition of a binding price ceiling in the market
B)  buyers expect the price of the good to be lower next month
C)  the price of a substitute increases
D)  income increases and buyers consider the good to be inferiorE) B) and C)
F) All of the above

Question 19

Figure 7-13 
-Refer to Figure 7-13.If the equilibrium price is $60,what is the producer surplus?

Accepted Answer

A)  $600
B)  $1,200
C)  $2,400
D)  $4,800E) None of the above
F) C) and D)

Question 20

A seller's willingness to sell is

Accepted Answer

A)  measured by the seller's cost of production.
B)  related to her supply curve,just as a buyer's willingness to buy is related to his demand curve.
C)  less than the price received if producer surplus is a positive number.
D)  All of the above are correct.E) All of the above
F) None of the above

Exam 7: Consumers Producers and the Efficiency of Markets: Producer Surplus

Figure 7-13 -Refer to Figure 7-13.If the equilibrium price is $60,what is the producer surplus?

Correct Answer
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Producer surplus equals

Correct Answer
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Figure 7-10 -Refer to Figure 7-10.Which area represents producer surplus when the price is P1?

Correct Answer
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Justin builds fences for a living.Justin's out-of-pocket expenses (for wood,paint,etc. ) plus the value that he places on his own time amount to his

Correct Answer
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Figure 7-15 -Refer to Figure 7-15.Suppose producer surplus is larger than C but smaller than A+B+C.The price of the good must be

Correct Answer
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Figure 7-11 -Refer to Figure 7-11.If the supply curve is S,the demand curve is D,and the equilibrium price is $100,what is the producer surplus?

Correct Answer
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Figure 7-15 -Refer to Figure 7-15.Area A represents

Correct Answer
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A seller is willing to sell a product only if the seller receives a price that is at least as great as the

Correct Answer
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Figure 7-11 -Refer to Figure 7-11.If the supply curve is S and the demand curve shifts from D to D',what is the change in producer surplus?

Correct Answer
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ABC Company incurs a cost of 50 cents to produce a dozen eggs,while XYZ Company incurs a cost of 70 cents to produce a dozen eggs.Which of the following price increases would cause both companies to experience an increase in producer surplus?

Correct Answer
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Figure 7-15 -Refer to Figure 7-15.When the price falls from P2 to P1,which of the following would not be true?

Correct Answer
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Producer surplus is

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

Correct Answer
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Figure 7-17 -Refer to Figure 7-17.If the demand curve is D and the supply curve shifts left from S to S',what is the change in producer surplus when comparing the new equilibrium with the original equilibrium?

Correct Answer
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Kristi and Rebecca sell lemonade on the corner.It costs them 7 cents to make each cup.On a certain day,they sell 40 cups.Their producer surplus for that day amounts to $19.20.Kristi & Rebecca sold each cup for

Correct Answer
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Figure 7-13 -Refer to Figure 7-13.If the equilibrium price rises from $60 to $120,what is the producer surplus to new producers in the market?

Correct Answer
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A seller's willingness to sell is

Correct Answer
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Figure 7-11 -Refer to Figure 7-11.If the demand curve is D and the supply curve shifts from S' to S,what is the change in producer surplus?

Correct Answer
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Exam 7: Consumers Producers and the Efficiency of Markets: Producer Surplus

Figure 7-13 -Refer to Figure 7-13.If the equilibrium price is $60,what is the producer surplus?

Correct AnswerverifiedShow Answer

Producer surplus equals

Correct AnswerverifiedShow Answer

Figure 7-10 -Refer to Figure 7-10.Which area represents producer surplus when the price is P1?

Correct AnswerverifiedShow Answer

Justin builds fences for a living.Justin's out-of-pocket expenses (for wood,paint,etc. ) plus the value that he places on his own time amount to his

Correct AnswerverifiedShow Answer

Figure 7-15 -Refer to Figure 7-15.Suppose producer surplus is larger than C but smaller than A+B+C.The price of the good must be

Correct AnswerverifiedShow Answer

Figure 7-11 -Refer to Figure 7-11.If the supply curve is S,the demand curve is D,and the equilibrium price is $100,what is the producer surplus?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 7-15 -Refer to Figure 7-15.Area A represents

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A seller is willing to sell a product only if the seller receives a price that is at least as great as the

Correct AnswerverifiedShow Answer

Figure 7-11 -Refer to Figure 7-11.If the supply curve is S and the demand curve shifts from D to D',what is the change in producer surplus?

Correct AnswerverifiedShow Answer

ABC Company incurs a cost of 50 cents to produce a dozen eggs,while XYZ Company incurs a cost of 70 cents to produce a dozen eggs.Which of the following price increases would cause both companies to experience an increase in producer surplus?

Correct AnswerverifiedShow Answer

Figure 7-15 -Refer to Figure 7-15.When the price falls from P2 to P1,which of the following would not be true?

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Producer surplus is

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

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Figure 7-17 -Refer to Figure 7-17.If the demand curve is D and the supply curve shifts left from S to S',what is the change in producer surplus when comparing the new equilibrium with the original equilibrium?

Correct AnswerverifiedShow Answer

Kristi and Rebecca sell lemonade on the corner.It costs them 7 cents to make each cup.On a certain day,they sell 40 cups.Their producer surplus for that day amounts to $19.20.Kristi & Rebecca sold each cup for

Correct AnswerverifiedShow Answer

Figure 7-13 -Refer to Figure 7-13.If the equilibrium price rises from $60 to $120,what is the producer surplus to new producers in the market?

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A seller's willingness to sell is

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Figure 7-11 -Refer to Figure 7-11.If the demand curve is D and the supply curve shifts from S' to S,what is the change in producer surplus?

Correct AnswerverifiedShow Answer

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