Question 1

Table 7-4
The numbers in Table 7-1 reveal the maximum willingness to pay for a ticket to a Chicago Cubs vs.St.Louis Cardinal's baseball game at Wrigley Field.
 
-Refer to Table 7-4.If you have a ticket that you sell to the group in an auction,who will buy the ticket?

Accepted Answer

A)   Dan
B)   David
C)   Ken
D)   LisaE) C) and D)
F) A) and B)

Question 2

Michael values a stainless steel refrigerator for his new house at $3,500,but he succeeds in buying one for $3,000.Michael's willingness to pay is

Accepted Answer

A)   $500.
B)   $3,000.
C)   $3,500.
D)   $6,500.E) A) and D)
F) B) and D)

Question 3

Figure 7-17 
-Refer to Figure 7-17.At equilibrium,total surplus is measured by the area

Accepted Answer

A)   ACG.
B)   AFG.
C)   KBG.
D)   CFG.E) All of the above
F) C) and D)

Question 4

Total surplus in a market is consumer surplus minus producer surplus.

Accepted Answer

A) True 
 B)False

Question 5

Producer surplus equals the

Accepted Answer

A)   value to buyers minus the amount paid by buyers.
B)   value to buyers minus the cost to sellers.
C)   amount received by sellers minus the cost to sellers.
D)   amount received by sellers minus the amount paid by buyers.E) None of the above
F) A) and D)

Question 6

Table 7-9
 
-Refer to Table 7-9.Both the demand curve and the supply curve are straight lines.If the price is $8 but only 4 units are bought and sold,consumer surplus will be

Accepted Answer

A)   $8.
B)   $12.
C)   $16.
D)   $18.E) A) and C)
F) B) and D)

Question 7

Chad is willing to pay $5.00 to get his first cup of morning latté.He buys a cup from a vendor selling latté for $3.75 per cup.Chad's consumer surplus is

Accepted Answer

A)   $8.75.
B)   $5.00.
C)   $3.75.
D)   $1.25.E) A) and D)
F) None of the above

Question 8

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

Accepted Answer

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

Question 9

Figure 7-16 
-Refer to Figure 7-16.If the price were P1,producer surplus would be represented by the area

Accepted Answer

A)   F.
B)   F+G.
C)   D+H+F.
D)   D+H+F+G+I.E) A) and D)
F) None of the above

Question 10

Total surplus in a market is equal to

Accepted Answer

A)   consumer surplus + producer surplus.
B)   value to buyers - amount paid by buyers.
C)   amount received by sellers - costs of sellers.
D)   producer surplus - consumer surplus.E) A) and B)
F) A) and C)

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Figure 7-12 
-Refer to Figure 7-12.If the government imposes a price floor of $70 in this market,then total surplus will be

Accepted Answer

A)   $0.
B)   $125.
C)   $375.
D)   $500.E) A) and B)
F) None of the above

Question 13

Figure 7-18 
-Refer to Figure 7-18.Sellers whose costs are less than the equilibrium price are represented by which line segment?

Accepted Answer

A)   AC.
B)   CK.
C)   BC.
D)   CH.E) A) and B)
F) A) and C)

Question 14

Which of the following statements is not correct about a market in equilibrium?

Accepted Answer

A)   The price determines which buyers and which sellers participate in the market.
B)   Those buyers who value the good more than the price choose to buy the good.
C)   Those sellers whose costs are less than the price choose to produce and sell the good.
D)   Consumer surplus will be equal to producer surplus.E) A) and B)
F) C) and D)

Question 15

We can say that the allocation of resources is efficient if

Accepted Answer

A)   producer surplus is maximized.
B)   consumer surplus is maximized.
C)   total surplus is maximized.
D)   sellers' costs are minimized.E) C) and D)
F) A) and B)

Question 16

Figure 7-12 
-Refer to Figure 7-12.At the equilibrium price,producer surplus is

Accepted Answer

A)   $150.
B)   $200.
C)   $300.
D)   $500.E) All of the above
F) A) and D)

Question 17

Suppose Chris and Laura attend a charity benefit and participate in a silent auction.Each has in mind a maximum amount that he or she will bid for an oil painting by a locally famous artist.This maximum is called

Accepted Answer

A)   deadweight loss.
B)   willingness to pay.
C)   consumer surplus.
D)   producer surplus.E) A) and B)
F) All of the above

Question 18

Consumer surplus can be measured as the area between the demand curve and the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 19

Table 7-9
 
-Refer to Table 7-9.At a price of $4.00,total surplus is

Accepted Answer

A)   more than it would be at the equilibrium price.
B)   less than it would be at the equilibrium price.
C)   the same as it would be at the equilibrium price.
D)   There is insufficient information to make this determination.E) C) and D)
F) B) and D)

Question 20

If the demand for a good or service increases,producer surplus

Accepted Answer

A)   increases.
B)   decreases.
C)   remains the same.
D)   may increase,decrease,or remain the same.E) A) and B)
F) A) and C)

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

Suppose Chris and Laura attend a charity benefit and participate in a silent auction.Each has in mind a maximum amount that he or she will bid for an oil painting by a locally famous artist.This maximum is called

Correct AnswerverifiedShow Answer

Total surplus in a market is consumer surplus minus producer surplus.

Correct AnswerverifiedShow Answer

If the demand for a good or service increases,producer surplus

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 7-16 -Refer to Figure 7-16.If the price were P1,producer surplus would be represented by the area

Correct AnswerverifiedShow Answer

Figure 7-12 -Refer to Figure 7-12.At the equilibrium price,producer surplus is

Correct AnswerverifiedShow Answer

Chad is willing to pay $5.00 to get his first cup of morning latté.He buys a cup from a vendor selling latté for $3.75 per cup.Chad's consumer surplus is

Correct AnswerverifiedShow Answer

Table 7-9 -Refer to Table 7-9.Both the demand curve and the supply curve are straight lines.If the price is $8 but only 4 units are bought and sold,consumer surplus will be

Correct AnswerverifiedShow Answer

Producer surplus equals the

Correct AnswerverifiedShow Answer

Total surplus in a market is equal to

Correct AnswerverifiedShow Answer

Figure 7-12 -Refer to Figure 7-12.If the government imposes a price floor of $70 in this market,then total surplus will be

Correct AnswerverifiedShow Answer

We can say that the allocation of resources is efficient if

Correct AnswerverifiedShow Answer

Consumer surplus can be measured as the area between the demand curve and the equilibrium price.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 7-17 -Refer to Figure 7-17.At equilibrium,total surplus is measured by the area

Correct AnswerverifiedShow Answer

Table 7-4 The numbers in Table 7-1 reveal the maximum willingness to pay for a ticket to a Chicago Cubs vs.St.Louis Cardinal's baseball game at Wrigley Field. -Refer to Table 7-4.If you have a ticket that you sell to the group in an auction,who will buy the ticket?

Correct AnswerverifiedShow Answer

Table 7-9 -Refer to Table 7-9.At a price of $4.00,total surplus is

Correct AnswerverifiedShow Answer

Figure 7-18 -Refer to Figure 7-18.Sellers whose costs are less than the equilibrium price are represented by which line segment?

Correct AnswerverifiedShow Answer

Michael values a stainless steel refrigerator for his new house at $3,500,but he succeeds in buying one for $3,000.Michael's willingness to pay is

Correct AnswerverifiedShow Answer

Which of the following statements is not correct about a market in equilibrium?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified