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) A) and D)
F) All of the above

Question 2

Figure 7-15 
-Refer to Figure 7-15. When the price falls from P2 to P1, producer surplus

Accepted Answer

A)   decreases by an amount equal to C.
B)   decreases by an amount equal to A+B.
C)   decreases by an amount equal to A+C.
D)   increases by an amount equal to A+B.E) None of the above
F) All of the above

Question 3

Scenario 7-2
Suppose market demand and market supply are given by the equations: 
-Refer to Scenario 7-2. How much is total consumer surplus at the equilibrium price in this market?

Accepted Answer

Total consumer surpl...

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) A) and B)
F) A) and C)

Question 5

Chad is willing to pay $5.00 to get his first cup of morning latté; he is willing to pay $4.50 for a second cup. He buys his first cup from a vendor selling latté for $3.75 per cup. He returns to that vendor later in the morning to find that the vendor has increased her price to $3.90 per cup. Chad buys a second cup. Which of the following statements is correct?

Accepted Answer

A)   Chad's willingness to pay for his second cup of latté was smaller than his willingness to pay for his first cup of latté.
B)   Chad's consumer surplus on his second cup of latté was larger than his consumer surplus on his first cup of latté.
C)   Chad is irrational in that he is willing to pay a different price for his second cup of latté than what he is willing to pay for his first cup of latté.
D)   Chad places a higher value on his second cup of latté than on his first cup of latté.E) A) and D)
F) B) and C)

Question 6

Figure 7-16 
-Refer to Figure 7-16. Suppose the price of the good is $400. Then, on the first unit of the good that is sold, producer surplus amounts to

Accepted Answer

A)   $200.
B)   $300.
C)   $400.
D)   $450.E) A) and D)
F) C) and D)

Question 7

The lower the price, the lower the producer surplus, all else equal.

Accepted Answer

A) True 
 B)False

Question 8

As a result of a decrease in price,

Accepted Answer

A)   new buyers enter the market, increasing consumer surplus.
B)   new buyers enter the market, decreasing consumer surplus.
C)   existing buyers exit the market, increasing consumer surplus.
D)   existing buyers exit the market, decreasing consumer surplus.E) B) and D)
F) A) and B)

Question 9

The consumption of water by local residents that may include pesticide runoff from local farmers' fields is an example of

Accepted Answer

A)   market equilibrium.
B)   market power.
C)   externalities.
D)   laissez-faire.E) B) and C)
F) A) and D)

Question 10

Table 7-7
 
-Refer to Table 7-7. 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. Who makes the winning bids, and what do they offer to pay for the tickets?

Accepted Answer

A)   Michael and Earvin; more than $350 but less than or equal to $400
B)   Michael and Earvin; more than $400 but less than or equal to $500
C)   Earvin and Larry; more than $300 but less than or equal to $350
D)   Larry and Charles; less than $300E) None of the above
F) B) and C)

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

Figure 7-16 -Refer to Figure 7-16. Suppose the price of the good is $400. Then, on the first unit of the good that is sold, producer surplus amounts to

Correct Answer
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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 Answer
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Scenario 7-2 Suppose market demand and market supply are given by the equations: -Refer to Scenario 7-2. How much is total consumer surplus at the equilibrium price in this market?

Correct Answer
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Total consumer surpl...
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The consumption of water by local residents that may include pesticide runoff from local farmers' fields is an example of

Correct Answer
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Figure 7-15 -Refer to Figure 7-15. When the price falls from P2 to P1, producer surplus

Correct Answer
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As a result of a decrease in price,

Correct Answer
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Correct Answer
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Market failure is the inability of

Correct Answer
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Correct Answer
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The lower the price, the lower the producer surplus, all else equal.

Correct Answer
verified

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

Figure 7-16 -Refer to Figure 7-16. Suppose the price of the good is $400. Then, on the first unit of the good that is sold, producer surplus amounts to

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

Scenario 7-2 Suppose market demand and market supply are given by the equations: -Refer to Scenario 7-2. How much is total consumer surplus at the equilibrium price in this market?

Correct AnswerverifiedTotal consumer surpl...View AnswerShow Answer

The consumption of water by local residents that may include pesticide runoff from local farmers' fields is an example of

Correct AnswerverifiedShow Answer

Figure 7-15 -Refer to Figure 7-15. When the price falls from P2 to P1, producer surplus

Correct AnswerverifiedShow Answer

As a result of a decrease in price,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Market failure is the inability of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The lower the price, the lower the producer surplus, all else equal.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Total consumer surpl...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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