Question 1

Figure 7-10
 
-Refer to Figure 7-10.At the market-clearing equilibrium,total surplus is represented by the area

Accepted Answer

A)  A + B + C.
B)  A + B + D + F.
C)  A + B + C + D + E + F.
D)  A + B + C + D + E + F + G + H.E) B) and D)
F) B) and C)

Question 2

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) All of the above
F) B) and C)

Question 3

The marginal seller is the seller

Accepted Answer

A)  for whom the marginal cost of producing one more unit of output is the lowest among all sellers, and the marginal buyer is the buyer for whom the marginal benefit of one more unit of the good is the highest among all buyers.
B)  who supplies the smallest quantity of the good among all sellers, and the marginal buyer is the buyer who demands the smallest quantity of the good among all buyers.
C)  who would leave the market first if the price were any lower, and the marginal buyer is the buyer who would leave the market first if the price were any higher.
D)  who has the largest producer surplus, and the marginal buyer is the buyer who has the largest consumer surplus.E) A) and D)
F) A) and C)

Question 4

Market failure is the inability of

Accepted Answer

A)  buyers to interact harmoniously with sellers in the market.
B)  a market to establish an equilibrium price.
C)  buyers to place a value on the good or service.
D)  some unregulated markets to allocate resources efficiently.E) B) and D)
F) A) and B)

Question 5

This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke.
Table 7-2
 
-Refer to Table 7-2.If the market price is $5.50,the consumer surplus in the market will be

Accepted Answer

A)  $3.00.
B)  $4.50.
C)  $15.50.
D)  $21.00.E) None of the above
F) B) and C)

Question 6

If a consumer is willing and able to pay $20 for a particular good and if he pays $16 for the good,then for that consumer,consumer surplus amounts to

Accepted Answer

A)  $4.
B)  $16.
C)  $20.
D)  $36.E) C) and D)
F) A) and B)

Question 7

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

Accepted Answer

A)  A
B)  B
C)  C
D)  DE) B) and C)
F) A) and C)

Question 8

Figure 7-11. On the graph below, Q represents the quantity of the good and P represents the good's price.
 
-Refer to Figure 7-11.If four units of the good are produced and sold,then

Accepted Answer

A)  the cost to sellers exceeds the value to buyers.
B)  producer surplus is maximized.
C)  total surplus is minimized.
D)  the allocation of resources is inefficient.E) A) and D)
F) A) and C)

Question 9

Figure 7-8
 
-Refer to Figure 7-8.Sellers whose costs are less than price are represented by which line segment?

Accepted Answer

A)  AC.
B)  CE.
C)  BC.
D)  CD.E) C) and D)
F) B) and D)

Question 10

Table 7-3
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day.
 
-Refer to Table 7-3.If the market price of an orange increases from $0.60 to $1.05,total consumer surplus

Accepted Answer

A)  increases by $2.90.
B)  decreases by $2.25.
C)  decreases by $2.70.
D)  decreases by $3.85.E) C) and D)
F) B) and D)

Question 11

Figure 7-1
 
-Refer to Figure 7-1.When the price rises from P₁ to P₂,consumer surplus

Accepted Answer

A)  increases by an amount equal to a.
B)  decreases by an amount equal to B + C.
C)  increases by an amount equal to B + C.
D)  decreases by an amount equal to C.E) B) and C)
F) All of the above

Question 12

Figure 7-9
 
-Refer to Figure 7-9.The efficient price is

Accepted Answer

A)  $22 and the efficient quantity is 40.
B)  $22 and the efficient quantity is 110.
C)  $16 and the efficient quantity is 80.
D)  $8 and the efficient quantity is 40.E) B) and C)
F) All of the above

Question 13

Marjorie is willing to pay $68 for a pair of shoes for a formal dance.She finds a pair at her favorite outlet shoe store for $48.Marjorie's consumer surplus is

Accepted Answer

A)  $10.
B)  $20.
C)  $48.
D)  $68.E) A) and D)
F) All of the above

Question 14

Suppose consumer income increases.If grass seed is a normal good,the equilibrium price of grass seed will

Accepted Answer

A)  decrease, and producer surplus in the industry will decrease.
B)  increase, and producer surplus in the industry will increase.
C)  decrease, and producer surplus in the industry will increase.
D)  increase, and producer surplus in the industry will decrease.E) All of the above
F) A) and B)

Question 15

When a buyer's willingness to pay for a good is equal to the price of the good,

Accepted Answer

A)  the buyer's consumer surplus for that good is maximized.
B)  the buyer will buy as much of the good as the buyer's budget allows.
C)  the price of the good exceeds the value that the buyer places on the good.
D)  the buyer is indifferent between buying the good and not buying it.E) C) and D)
F) None of the above

Question 16

Figure 7-9
 
-Refer to Figure 7-9.At the equilibrium price,producer surplus is

Accepted Answer

A)  $480.
B)  $640.
C)  $1,120.
D)  $1,280.E) A) and B)
F) B) and C)

Question 17

Connie can clean windows in large office buildings at a cost of $1 per window.The market price for window-cleaning services is $3 per window.If Connie cleans 100 windows,her producer surplus is $100.

Accepted Answer

A) True 
 B)False

Question 18

Producer surplus is

Accepted Answer

A)  represented on a graph by the area below the demand curve and above the supply curve.
B)  the amount a seller is paid minus the cost of production.
C)  also referred to as excess supply.
D)  All of the above are correct.E) B) and C)
F) B) and D)

Question 19

Figure 7-6
 
-Refer to Figure 7-6.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) A) and B)
F) A) and C)

Question 20

This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke.
Table 7-2
 
-Refer to Table 7-2.Which of the following is not true?

Accepted Answer

A)  At a price of $9.00, no buyer is willing to purchase Vanilla Coke.
B)  At a price of $5.50, Megan is indifferent between buying a case of Vanilla Coke and not buying one.
C)  At a price of $4.00, total consumer surplus in the market will be $9.00.
D)  All of the above are correct.E) None of the above
F) All of the above

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

Figure 7-9 -Refer to Figure 7-9.At the equilibrium price,producer surplus is

Correct Answer
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Connie can clean windows in large office buildings at a cost of $1 per window.The market price for window-cleaning services is $3 per window.If Connie cleans 100 windows,her producer surplus is $100.

Correct Answer
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Market failure is the inability of

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The marginal seller is the seller

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Figure 7-1 -Refer to Figure 7-1.When the price rises from P₁ to P₂,consumer surplus

Correct Answer
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This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. Table 7-2 -Refer to Table 7-2.If the market price is $5.50,the consumer surplus in the market will be

Correct Answer
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Figure 7-10 -Refer to Figure 7-10.At the market-clearing equilibrium,total surplus is represented by the area

Correct Answer
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When a buyer's willingness to pay for a good is equal to the price of the good,

Correct Answer
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Figure 7-8 -Refer to Figure 7-8.Sellers whose costs are less than price are represented by which line segment?

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Figure 7-11. On the graph below, Q represents the quantity of the good and P represents the good's price. -Refer to Figure 7-11.If four units of the good are produced and sold,then

Correct Answer
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If a consumer is willing and able to pay $20 for a particular good and if he pays $16 for the good,then for that consumer,consumer surplus amounts to

Correct Answer
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Marjorie is willing to pay $68 for a pair of shoes for a formal dance.She finds a pair at her favorite outlet shoe store for $48.Marjorie's consumer surplus is

Correct Answer
verified

Suppose consumer income increases.If grass seed is a normal good,the equilibrium price of grass seed will

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

Correct Answer
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Figure 7-9 -Refer to Figure 7-9.The efficient price is

Correct Answer
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Inefficiency exists in an economy when a good is

Correct Answer
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Figure 7-6 -Refer to Figure 7-6.Area A represents

Correct Answer
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This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. Table 7-2 -Refer to Table 7-2.Which of the following is not true?

Correct Answer
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Producer surplus is

Correct Answer
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Exam 7: Consumers, producers, and the Efficiency of Markets

Figure 7-9 -Refer to Figure 7-9.At the equilibrium price,producer surplus is

Correct AnswerverifiedShow Answer

Connie can clean windows in large office buildings at a cost of $1 per window.The market price for window-cleaning services is $3 per window.If Connie cleans 100 windows,her producer surplus is $100.

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Market failure is the inability of

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The marginal seller is the seller

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Figure 7-1 -Refer to Figure 7-1.When the price rises from P₁ to P₂,consumer surplus

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This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. Table 7-2 -Refer to Table 7-2.If the market price is $5.50,the consumer surplus in the market will be

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Figure 7-10 -Refer to Figure 7-10.At the market-clearing equilibrium,total surplus is represented by the area

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When a buyer's willingness to pay for a good is equal to the price of the good,

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Figure 7-8 -Refer to Figure 7-8.Sellers whose costs are less than price are represented by which line segment?

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Figure 7-11. On the graph below, Q represents the quantity of the good and P represents the good's price. -Refer to Figure 7-11.If four units of the good are produced and sold,then

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If a consumer is willing and able to pay $20 for a particular good and if he pays $16 for the good,then for that consumer,consumer surplus amounts to

Correct AnswerverifiedShow Answer

Marjorie is willing to pay $68 for a pair of shoes for a formal dance.She finds a pair at her favorite outlet shoe store for $48.Marjorie's consumer surplus is

Correct AnswerverifiedShow Answer

Suppose consumer income increases.If grass seed is a normal good,the equilibrium price of grass seed will

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

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Figure 7-9 -Refer to Figure 7-9.The efficient price is

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Inefficiency exists in an economy when a good is

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Figure 7-6 -Refer to Figure 7-6.Area A represents

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This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. Table 7-2 -Refer to Table 7-2.Which of the following is not true?

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Producer surplus is

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