Question 1

Kristi sells purses. Her cost is $35 per purse. On a certain day, she sells 12 purses, and her producer surplus for that day amounts to $180. Kristi sold each purse for
A)$65.
B)$50.
C)$45.
D)$53.

Accepted Answer

The answer of Kristi sells purses. Her cost is $35...

Question 2

Table 7-10
The following table represents the costs of five possible sellers.
Seller
Cost
Abby
$1,600
Bobby
$1,300
Dianne
$1,100
Evaline
$900
Carlos
$800
-Refer to Table 7-10. Suppose each of the five sellers can supply at most one unit of the good. The market quantity supplied is exactly 2 if the price is
A)$1,700.
B)$1,100.
C)$1,650.
D)$1,050.

Accepted Answer

The answer of Table 7-10
The following table represents the costs...

Question 3

Table 7-10
The following table represents the costs of five possible sellers.
Seller
Cost
Abby
$1,600
Bobby
$1,300
Dianne
$1,100
Evaline
$900
Carlos
$800
-Refer to Table 7-10. If the market price is $1,200, the producer surplus in the market is
A)$100.
B)$800.
C)$400.
D)$500.

Accepted Answer

Producer surplus is the difference between the market price and the seller's cost. Since the market price is $1,200, the producer surplus for each seller would be:
Abby: $0 (market price=$1,200, cost=$1,600)
Bobby: $100 (market price=$1,200, cost=$1,300)
Dianne: $100 (market price=$1,200, cost=$1,100)
Evaline: $300 (market price=$1,200, cost=$900)
Carlos: $400 (market price=$1,200, cost=$800)
The total producer surplus in the market would be $800 (sum of individual producer surplus). Therefore, the best choice would be seller Carlos with a producer surplus of $400, which is the highest among all sellers.

Question 4

Bill created a new software program he is willing to sell for $300. He sells his first copy and enjoys a producer surplus of $250. What is the price paid for the software?
A)$50.
B)$250.
C)$300.
D)$550.

Accepted Answer

The answer of Bill created a new software program he...

Question 5

At Nick's Bakery, the cost to make a cheese danish is $1.50 per danish. As a result of selling ten danishes, Nick experiences a producer surplus in the amount of $20. Nick must be selling his danishes for
A)$2.00 each.
B)$0.50 each.
C)$3.50 each.
D)$5.00 each.

Accepted Answer

The producer surplus is the difference between the price a producer receives and the cost to produce it.

Let x be the selling price of one danish.

Nick's revenue from selling 10 danishes would be 10x.

Nick's cost to produce 10 danishes would be 10($1.50) = $15.

Nick's producer surplus is $20.

Therefore, we have:

10x - $15 = $20

10x = $35

x = $3.50

Therefore, Nick must be selling his danishes for $3.50 each in order to have a producer surplus of $20 from selling ten danishes.

Question 6

Table 7-11
The only four producers in a market have the following costs:
Seller
Cost
Evan
$50
Selena
$100
Angie
$150
Kris
$200
-Refer to Table 7-11. If Evan, Selena, and Angie sell the good, and the resulting producer surplus is $300, then the price must have been
A)$200.
B)$300.
C)$450.
D)$600.

Accepted Answer

The answer of Table 7-11
The only four producers in a...

Question 7

Table 7-10
The following table represents the costs of five possible sellers.
Seller
Cost
Abby
$1,600
Bobby
$1,300
Dianne
$1,100
Evaline
$900
Carlos
$800
-Refer to Table 7-10. If the market price is $1,000, the producer surplus in the market is
A)$1000.
B)$300.
C)$1,700.
D)$700.

Accepted Answer

To calculate producer surplus, we need to find the difference between the market price and the cost of production for each seller. The table below shows the producer surplus for each seller at a market price of $1,000:

Seller	Cost	Producer Surplus
Abby	$1,600	$0
Bobby	$1,300	$300
Dianne	$1,100	$900
Evaline	$900	$1,100
Carlos	$800	$1,200

The producer surplus in the market is the sum of all the producer surpluses, which is $2,500. Therefore, the correct answer is B, as this is the closest option to the calculated value of producer surplus.

Question 8

Table 7-10
The following table represents the costs of five possible sellers.
Seller
Cost
Abby
$1,600
Bobby
$1,300
Dianne
$1,100
Evaline
$900
Carlos
$800
-Refer to Table 7-10. Suppose each of the five sellers can supply at most one unit of the good. The market quantity supplied is exactly 4 if the price is
A)$860.
B)$1,050.
C)$1,650.
D)$1,400.

Accepted Answer

To have exactly 4 units supplied, we must choose the four sellers with the lowest costs. Those would be Carlos, Evaline, Dianne, and Bobby. The total cost would be $3,100, which would be the minimum cost to supply 4 units. To find the price, we divide the total cost by the quantity, giving us $1,400. Therefore, the answer is D.

Question 9

At Nick's Bakery, the cost to make homemade chocolate cake is $4 per cake. As a result of selling five cakes, Nick experiences a producer surplus in the amount of $17.50. Nick must be selling his cakes for
A)$6.50 each.
B)$7.50 each.
C)$9.50 each.
D)$10.50 each.

Accepted Answer

Nick's cost to make 5 cakes is $20 (4*5).

If Nick is experiencing a producer surplus of $17.50, this means he is selling his cakes for more than his cost of production.

To find out how much Nick is selling each cake for, we can divide the surplus by the number of cakes sold:

$17.50/5 cakes = $3.50

This means that Nick is selling each cake for $3.50 more than it costs him to make it ($7.50 - $4.00 = $3.50).

Therefore, choice B ($7.50 each) is the correct answer.

Question 10

Table 7-10
The following table represents the costs of five possible sellers.
Seller
Cost
Abby
$1,600
Bobby
$1,300
Dianne
$1,100
Evaline
$900
Carlos
$800
-Refer to Table 7-10. If the market price is $1,400, the combined total cost of all participating sellers is
A)$5,700.
B)$1,500.
C)$1,400.
D)$4,100.

Accepted Answer

To find the combined total cost of all participating sellers, we need to add up the costs of the sellers whose costs are less than or equal to the market price of $1,400. in this case, the sellers with costs within this range are Abby, Bobby, and Dianne.

The total cost would be $1,600 + $1,300 + $1,100 = $4,000.

Therefore, the best choice is D.

Question 11

Table 7-11
The only four producers in a market have the following costs:
Seller
Cost
Evan
$50
Selena
$100
Angie
$150
Kris
$200
-Refer to Table 7-11. If the sellers bid against each other for the right to sell the good to a consumer, then the producer surplus will be
A)$0 or slightly more.
B)$50 or slightly less.
C)$150 or slightly less.
D)$200 or slightly more.

Accepted Answer

The answer of Table 7-11
The only four producers in a...

Question 12

Donald produces nails at a cost of $350 per ton. If he sells the nails for $500 per ton, his producer surplus is
A)$150.
B)$350.
C)$500.
D)$850.

Accepted Answer

The answer of Donald produces nails at a cost of...

Question 13

Table 7-11
The only four producers in a market have the following costs:
Seller
Cost
Evan
$50
Selena
$100
Angie
$150
Kris
$200
-Refer to Table 7-11. If the sellers bid against each other for the right to sell the good to a consumer, then the good will sell for
A)$50 or slightly more.
B)$100 or slightly less.
C)$150 or slightly less.
D)$200 or slightly more.

Accepted Answer

The market price will be determined by the producer with the highest cost, which is $100 for producer C. Therefore, the good will sell for $100 or slightly less, as the other producers may choose to set lower prices to attract buyers.

Question 14

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
A)31 cents.
B)38 cents.
C)45 cents.
D)55 cents.

Accepted Answer

The answer of Kristi and Rebecca sell lemonade on the...

Question 15

Bill created a new software program he is willing to sell for $200. He sells his first copy and enjoys a producer surplus of $150. What is the price paid for the software?
A)$50.
B)$150.
C)$200.
D)$350.

Accepted Answer

The answer of Bill created a new software program he...

Question 16

Table 7-10
The following table represents the costs of five possible sellers.
Seller
Cost
Abby
$1,600
Bobby
$1,300
Dianne
$1,100
Evaline
$900
Carlos
$800
-Refer to Table 7-10. If the price is $1,l50, who would be willing to supply the product?
A)Abby and Bobby
B)Abby, Bobby, and Dianne
C)Carlos, Dianne, and Evaline
D)Dianne and Evaline only

Accepted Answer

The answer of Table 7-10
The following table represents the costs...

Question 17

Table 7-10
The following table represents the costs of five possible sellers.
Seller
Cost
Abby
$1,600
Bobby
$1,300
Dianne
$1,100
Evaline
$900
Carlos
$800
-Refer to Table 7-10. If the market price is $1,100, the combined total cost of all participating sellers is
A)$2,800.
B)$2,900.
C)$1,700.
D)$4,000.

Accepted Answer

The answer of Table 7-10
The following table represents the costs...

Question 18

Table 7-10
The following table represents the costs of five possible sellers.
Seller
Cost
Abby
$1,600
Bobby
$1,300
Dianne
$1,100
Evaline
$900
Carlos
$800
-Refer to Table 7-10. If the price is $1,000,
A)Bobby is an eager supplier.
B)Dianne is an eager supplier.
C)Evaline's producer surplus is $100.
D)All of the above are correct.

Accepted Answer

Evaluating producer surplus is calculated by taking the difference between the price that a producer receives and the seller's cost. In this case, Evaline's cost is $900 and the price is $1,000, so her producer surplus is $100 ($1,000 - $900 = $100). Bobby and Dianne's costs exceed the price, so they are unlikely to be eager suppliers at this price point.

Question 19

Kristi and Rebecca sell lemonade on the corner for $0.50 per cup. It costs them $0.10 to make each cup. On a certain day, their producer surplus is $20. How many cups did Kristi and Rebecca sell?
A)40.
B)200.
C)8.
D)50.

Accepted Answer

Producer surplus is the difference between the price at which a good is sold and the cost of producing it. In this case, their producer surplus is $0.40 per cup ($0.50 - $0.10). 
So, for every 50 cups sold, they would make a producer surplus of $20 (50 cups x $0.40 per cup = $20). Therefore, the answer is 50 cups.

Question 20

Table 7-10
The following table represents the costs of five possible sellers.
Seller
Cost
Abby
$1,600
Bobby
$1,300
Dianne
$1,100
Evaline
$900
Carlos
$800
-Refer to Table 7-10. Who is a marginal seller when the price is $1,100?
A)Dianne
B)Bobby and Abby
C)Carlos, Dianne, and Evaline
D)Carlos, Dianne, Evaline, and Bobby

Accepted Answer

The answer of Table 7-10
The following table represents the costs...

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

Kristi sells purses. Her cost is $35 per purse. On a certain day, she sells 12 purses, and her producer surplus for that day amounts to $180. Kristi sold each purse for

Table 7-10 The following table represents the costs of five possible sellers. Seller Cost Abby $1,600 Bobby $1,300 Dianne $1,100 Evaline $900 Carlos $800 -Refer to Table 7-10. If the market price is $1,200, the producer surplus in the market is

Bill created a new software program he is willing to sell for $300. He sells his first copy and enjoys a producer surplus of $250. What is the price paid for the software?

At Nick's Bakery, the cost to make a cheese danish is $1.50 per danish. As a result of selling ten danishes, Nick experiences a producer surplus in the amount of $20. Nick must be selling his danishes for

Table 7-11 The only four producers in a market have the following costs: Seller Cost Evan $50 Selena $100 Angie $150 Kris $200 -Refer to Table 7-11. If Evan, Selena, and Angie sell the good, and the resulting producer surplus is $300, then the price must have been

Table 7-10 The following table represents the costs of five possible sellers. Seller Cost Abby $1,600 Bobby $1,300 Dianne $1,100 Evaline $900 Carlos $800 -Refer to Table 7-10. If the market price is $1,000, the producer surplus in the market is

At Nick's Bakery, the cost to make homemade chocolate cake is $4 per cake. As a result of selling five cakes, Nick experiences a producer surplus in the amount of $17.50. Nick must be selling his cakes for

Table 7-10 The following table represents the costs of five possible sellers. Seller Cost Abby $1,600 Bobby $1,300 Dianne $1,100 Evaline $900 Carlos $800 -Refer to Table 7-10. If the market price is $1,400, the combined total cost of all participating sellers is

Table 7-11 The only four producers in a market have the following costs: Seller Cost Evan $50 Selena $100 Angie $150 Kris $200 -Refer to Table 7-11. If the sellers bid against each other for the right to sell the good to a consumer, then the producer surplus will be

Donald produces nails at a cost of $350 per ton. If he sells the nails for $500 per ton, his producer surplus is

Table 7-11 The only four producers in a market have the following costs: Seller Cost Evan $50 Selena $100 Angie $150 Kris $200 -Refer to Table 7-11. If the sellers bid against each other for the right to sell the good to a consumer, then the good will sell for

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

Bill created a new software program he is willing to sell for $200. He sells his first copy and enjoys a producer surplus of $150. What is the price paid for the software?

Table 7-10 The following table represents the costs of five possible sellers. Seller Cost Abby $1,600 Bobby $1,300 Dianne $1,100 Evaline $900 Carlos $800 -Refer to Table 7-10. If the price is $1,l50, who would be willing to supply the product?

Table 7-10 The following table represents the costs of five possible sellers. Seller Cost Abby $1,600 Bobby $1,300 Dianne $1,100 Evaline $900 Carlos $800 -Refer to Table 7-10. If the market price is $1,100, the combined total cost of all participating sellers is

Table 7-10 The following table represents the costs of five possible sellers. Seller Cost Abby $1,600 Bobby $1,300 Dianne $1,100 Evaline $900 Carlos $800 -Refer to Table 7-10. If the price is $1,000,

Kristi and Rebecca sell lemonade on the corner for $0.50 per cup. It costs them $0.10 to make each cup. On a certain day, their producer surplus is $20. How many cups did Kristi and Rebecca sell?

Table 7-10 The following table represents the costs of five possible sellers. Seller Cost Abby $1,600 Bobby $1,300 Dianne $1,100 Evaline $900 Carlos $800 -Refer to Table 7-10. Who is a marginal seller when the price is $1,100?