Quiz 7: Consumers, Producers, and the Efficiency of Markets
Business
Q 1Q 1
Which of the following statements is correct?
A) Buyers always want to pay less and sellers always want to be paid more.
B) Buyers always want to pay less and sellers always want to be paid less.
C) Buyers always want to pay more and sellers always want to be paid more.
D) Buyers always want to pay more and sellers always want to be paid less.
Free
Multiple Choice
A
Q 2Q 2
Welfare economics is the study of how
A) the allocation of resources affects economic well-being.
B) a price ceiling compares to a price floor.
C) the government helps poor people.
D) a consumer's optimal choice affects her demand curve.
Free
Multiple Choice
A
Q 3Q 3
Welfare economics is the study of
A) taxes and subsidies.
B) how technology is best put to use in the production of goods and services.
C) government welfare programs for needy people.
D) how the allocation of resources affects economic well-being.
Free
Multiple Choice
D
Q 4Q 4
Welfare economics is the study of
A) the well-being of less fortunate people.
B) welfare programs in the United States.
C) how the allocation of resources affects economic well-being.
D) the effect of income redistribution on work effort.
Free
Multiple Choice
Q 5Q 5
The study of how the allocation of resources affects economic well-being is called
A) consumer economics.
B) macroeconomics.
C) willingness-to-pay economics.
D) welfare economics.
Free
Multiple Choice
Q 6Q 6
An example of positive analysis is studying
A) how market forces produce equilibrium.
B) whether equilibrium outcomes are fair.
C) whether equilibrium outcomes are socially desirable.
D) if income distributions are fair.
Free
Multiple Choice
Q 7Q 7
An example of normative analysis is studying
A) how market forces produce equilibrium.
B) surpluses and shortages.
C) whether equilibrium outcomes are socially desirable.
D) income distributions.
Free
Multiple Choice
Q 8Q 8
Which of the Ten Principles of Economics does welfare economics explain more fully?
A) The cost of something is what you give up to get it.
B) Markets are usually a good way to organize economic activity.
C) Trade can make everyone better off.
D) A country's standard of living depends on its ability to produce goods and services.
Free
Multiple Choice
Q 9Q 9
Which of the Ten Principles of Economics does welfare economics explain more fully?
A) The cost of something is what you give up to get it.
B) Rational people think at the margin.
C) Markets are usually a good way to organize economic activity.
D) People respond to incentives.
Free
Multiple Choice
Q 10Q 10
One of the basic principles of economics is that markets are usually a good way to organize economic activity. This principle is explained by the study of
A) factor markets.
B) energy markets.
C) welfare economics.
D) labor economics.
Free
Multiple Choice
Q 11Q 11
A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it
A) maximizes both the total revenue for firms and the quantity supplied of the product.
B) maximizes the combined welfare of buyers and sellers.
C) minimizes costs and maximizes output.
D) minimizes the level of welfare payments.
Free
Multiple Choice
Q 12Q 12
The particular price that results in quantity supplied being equal to quantity demanded is the best price because it
A) maximizes costs of the seller.
B) maximizes tax revenue for the government.
C) maximizes the combined welfare of buyers and sellers.
D) minimizes the expenditure of buyers.
Free
Multiple Choice
Q 13Q 13
Welfare economics explains which of the following in the market for televisions?
A) The government sets the price of televisions; firms respond to the price by producing a specific level of output.
B) The government sets the quantity of televisions; firms respond to the quantity by charging a specific price.
C) The market equilibrium price for televisions maximizes the total welfare of television buyers and sellers.
D) The market equilibrium price for televisions maximizes consumer welfare and minimizes producer profit.
Free
Multiple Choice
Q 14Q 14
The maximum price that a buyer will pay for a good is called
A) consumer surplus.
B) willingness to pay.
C) equilibrium.
D) efficiency.
Free
Multiple Choice
Q 15Q 15
Suppose Larry, Moe, and Curly are bidding in an auction for a mint-condition video of Charlie Chaplin's first movie. Each has in mind a maximum amount that he will bid. This maximum is called
A) a resistance price.
B) willingness to pay.
C) consumer surplus.
D) producer surplus.
Free
Multiple Choice
Q 16Q 16
Suppose Raymond and Victoria 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
A) deadweight loss.
B) willingness to pay.
C) consumer surplus.
D) producer surplus.
Free
Multiple Choice
Q 17Q 17
Willingness to pay
A) measures the value that a buyer places on a good.
B) is the amount a seller actually receives for a good minus the minimum amount the seller is willing to accept.
C) is the maximum amount a buyer is willing to pay minus the minimum amount a seller is willing to accept.
D) is the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.
Free
Multiple Choice
Q 18Q 18
A consumer's willingness to pay directly measures
A) the extent to which advertising and other external forces have influenced the consumer's preferences.
B) the cost of a good to the buyer.
C) how much a buyer values a good.
D) consumer surplus.
Free
Multiple Choice
Q 19Q 19
When a buyer's willingness to pay for a good is equal to the price of the good, the
A) buyer's consumer surplus for that good is maximized.
B) buyer will buy as much of the good as the buyer's budget allows.
C) price of the good exceeds the value that the buyer places on the good.
D) buyer is indifferent between buying the good and not buying it.
Free
Multiple Choice
Q 20Q 20
In which of the following circumstances would a buyer be indifferent about buying a good?
A) The amount of consumer surplus the buyer would experience as a result of buying the good is zero.
B) The price of the good is equal to the buyer's willingness to pay for the good.
C) The price of the good is equal to the value the buyer places on the good.
D) All of the above are correct.
Free
Multiple Choice
Q 21Q 21
A demand curve reflects each of the following except the
A) willingness to pay of all buyers in the market.
B) value each buyer in the market places on the good.
C) highest price buyers are willing to pay for each quantity.
D) ability of buyers to obtain the quantity they desire.
Free
Multiple Choice
Q 22Q 22
Consumer surplus
A) is closely related to the supply curve for a product.
B) is represented by a rectangle on a supply-demand graph when the demand curve is a straight, downward- sloping line.
C) is measured using the demand curve for a product.
D) does not reflect economic well-being in most markets.
Free
Multiple Choice
Q 23Q 23
Consumer surplus is
A) the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.
B) the amount a buyer is willing to pay for a good minus the cost of producing the good.
C) the amount by which the quantity supplied of a good exceeds the quantity demanded of the good.
D) a buyer's willingness to pay for a good plus the price of the good.
Free
Multiple Choice
Q 24Q 24
Consumer surplus
A) is the amount a buyer pays for a good minus the amount the buyer is willing to pay for it.
B) is represented on a supply-demand graph by the area below the price and above the demand curve.
C) measures the benefit sellers receive from participating in a market.
D) measures the benefit buyers receive from participating in a market.
Free
Multiple Choice
Q 25Q 25
Consumer surplus
A) is the amount of a good that a consumer can buy at a price below equilibrium price.
B) is the amount a consumer is willing to pay minus the amount the consumer actually pays.
C) is the number of consumers who are excluded from a market because of scarcity.
D) measures how much a seller values a good.
Free
Multiple Choice
Q 26Q 26
Consumer surplus is the
A) amount of a good consumers get without paying anything.
B) amount a consumer pays minus the amount the consumer is willing to pay.
C) amount a consumer is willing to pay minus the amount the consumer actually pays.
D) value of a good to a consumer.
Free
Multiple Choice
Q 27Q 27
Consumer surplus is equal to the
A) Value to buyers - Amount paid by buyers.
B) Amount paid by buyers - Costs of sellers.
C) Value to buyers - Costs of sellers.
D) Value to buyers - Willingness to pay of buyers.
Free
Multiple Choice
Q 28Q 28
On a graph, the area below a demand curve and above the price measures
A) producer surplus.
B) consumer surplus.
C) deadweight loss.
D) willingness to pay.
Free
Multiple Choice
Q 29Q 29
On a graph, consumer surplus is represented by the area
A) between the demand and supply curves.
B) below the demand curve and above price.
C) below the price and above the supply curve.
D) below the demand curve and to the right of equilibrium price.
Free
Multiple Choice
Q 30Q 30
Consumer surplus in a market can be represented by the
A) area below the demand curve and above the price.
B) distance from the demand curve to the horizontal axis.
C) distance from the demand curve to the vertical axis.
D) area below the demand curve and above the horizontal axis.
Free
Multiple Choice
Q 31Q 31
Consumer surplus is
A) a concept that helps us make normative statements about the desirability of market outcomes.
B) represented on a graph by the area below the demand curve and above the price.
C) a good measure of economic welfare if buyers' preferences are the primary concern.
D) All of the above are correct.
Free
Multiple Choice
Q 32Q 32
In a market, the marginal buyer is the buyer
A) whose willingness to pay is higher than that of all other buyers and potential buyers.
B) whose willingness to pay is lower than that of all other buyers and potential buyers.
C) who is willing to buy exactly one unit of the good.
D) who would be the first to leave the market if the price were any higher.
Free
Multiple Choice
Q 33Q 33
Table 7-1
-Refer to Table 7-1. If the price of the product is $110, then who would be willing to purchase the product?
A) Calvin
B) Calvin and Sam
C) Calvin, Sam, and Andrew
D) Calvin, Sam, Andrew, and Lori
Free
Multiple Choice
Q 34Q 34
Table 7-1
-Refer to Table 7-1. If the price of the product is $130, then who would be willing to purchase the product?
A) Calvin
B) Calvin and Sam
C) Calvin, Sam, and Andrew
D) Calvin, Sam, Andrew, and Lori
Free
Multiple Choice
Q 35Q 35
Table 7-1
-Refer to Table 7-1. If the price of the product is $90, then who would be willing to purchase the product?
A) Calvin
B) Calvin and Sam
C) Calvin, Sam, and Andrew
D) Calvin, Sam, Andrew, and Lori
Free
Multiple Choice
Q 36Q 36
Table 7-1
-Refer to Table 7-1. If the price of the product is $122, then the total consumer surplus is
Free
Multiple Choice
Q 37Q 37
Table 7-1
-Refer to Table 7-1. If price of the product is $135, then the total consumer surplus is
A) $-50.
B) $-35.
C) $15.
D) $150.
Free
Multiple Choice
Q 38Q 38
Table 7-1
-Refer to Table 7-1. If the market price is $105,
A) Calvin's consumer surplus is $45 and total consumer surplus is $85.
B) Sam's consumer surplus is $30 and total consumer surplus is $90.
C) Andrew's consumer surplus is $15 and total consumer surplus is $67.50.
D) Lori's consumer surplus is $2 and total consumer surplus is $100.
Free
Multiple Choice
Q 39Q 39
Table 7-2
This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke.
-Refer to Table 7-2. If the price of Vanilla Coke is $6.90, who will purchase the good?
A) all five individuals
B) Megan, Mallory and Audrey
C) David, Laura and Megan
D) David and Laura
Free
Multiple Choice
Q 40Q 40
Table 7-2
This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke.
-Refer to Table 7-2. Which of the following is not true?
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.
Free
Multiple Choice
Q 41Q 41
Table 7-2
This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke.
-Refer to Table 7-2. If the market price is $5.50, the consumer surplus in the market will be
A) $3.00.
B) $4.50.
C) $15.50.
D) $21.00.
Free
Multiple Choice
Q 42Q 42
Table 7-2
This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke.
-Refer to Table 7-2. If the market price is $3.80,
A) David's consumer surplus is $4.70 and total consumer surplus for the five individuals is $9.50.
B) Megan's consumer surplus is $1.70 and total consumer surplus for the five individuals is $9.80.
C) David, Laura, and Megan will be the only buyers of Vanilla Coke.
D) the demand curve for Vanilla Coke, taking the five individuals into account, is horizontal.
Free
Multiple Choice
Q 43Q 43
Table 7-3
The only four consumers in a market have the following willingness to pay for a good:
-Refer to Table 7-3. If the market price for the good is $20, who will purchase the good?
A) Ming-la only
B) Carlos and Quilana only
C) Quilana and Wilbur only
D) Quilana, Wilbur, and Ming-la only
Free
Multiple Choice
Q 44Q 44
Table 7-3
The only four consumers in a market have the following willingness to pay for a good:
-Refer to Table 7-3. If there is only one unit of the good and if the buyers bid against each other for the right to purchase it, then the good will sell for
A) $15 or slightly less.
B) $25 or slightly more.
C) $35 or slightly more.
D) $45 or slightly less.
Free
Multiple Choice
Q 45Q 45
Table 7-3
The only four consumers in a market have the following willingness to pay for a good:
-Refer to Table 7-3. If there is only one unit of the good and if the buyers bid against each other for the right to purchase it, then the consumer surplus will be
A) $0 or slightly more.
B) $10 or slightly less.
C) $30 or slightly more.
D) $45 or slightly less.
Free
Multiple Choice
Q 46Q 46
Table 7-3
The only four consumers in a market have the following willingness to pay for a good:
-Refer to Table 7-3. If the price is $20, then consumer surplus in the market is
A) $20, and Wilbur and Ming-la purchase the good.
B) $45, and Carlos and Quilana purchase the good.
C) $45, and Quilana, Wilbur, and Ming-la purchase the good.
D) $55, and Carlos, Wilbur, and Ming-la purchase the good.
Free
Multiple Choice
Q 47Q 47
Table 7-3
The only four consumers in a market have the following willingness to pay for a good:
-Refer to Table 7-3. Who experiences the largest loss of consumer surplus when the price of the good increases from $20 to $22?
A) Quilana
B) Wilbur
C) Ming-la
D) All three buyers experience the same loss of consumer surplus.
Free
Multiple Choice
Q 48Q 48
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, what will be the selling price?
A) slightly more than $20.
B) slightly more than $25.
C) slightly more than $50.
D) slightly more than $60.
Free
Multiple Choice
Q 49Q 49
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?
A) Dan
B) David
C) Ken
D) Lisa
Free
Multiple Choice
Q 50Q 50
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 tickets sell for $40 each, then what is the total consumer surplus in the market?
A) $30.
B) $90.
C) $70.
D) $110.
Free
Multiple Choice
Q 51Q 51
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 tickets sell for $25 each, then what is the total consumer surplus in the market?
A) $25
B) $35
C) $60
D) $110
Free
Multiple Choice
Q 52Q 52
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 two (essentially) identical tickets that you sell to the group in an auction, what will be the selling price for each ticket?
Free
Multiple Choice
Q 53Q 53
Table 7-5
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day.
-Refer to Table 7-5. If the market price of an orange is $0.90, then the market quantity of oranges demanded per day is
A) 5.
B) 2.
C) 3.
D) 4.
Free
Multiple Choice
Q 54Q 54
Table 7-5
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day.
-Refer to Table 7-5. If the market price of an orange is $0.70, then the market quantity of oranges demanded per day is
A) 5.
B) 6.
C) 4.
D) 7.
Free
Multiple Choice
Q 55Q 55
Table 7-5
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day.
-Refer to Table 7-5. The market quantity of oranges demanded per day is exactly 7 if the price of an orange, P, satisfies
A) $0.60 < P < $0.75.
B) $0.60 < P < $2.00.
C) $0.25 < P < $0.75.
D) $0.25 < P < $0.60.
Free
Multiple Choice
Q 56Q 56
Table 7-5
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day.
-Refer to Table 7-5. If the market price of an orange is $0.65, then consumer surplus amounts to
A) $3.90.
B) $6.75.
C) $3.60.
D) $7.50.
Free
Multiple Choice
Q 57Q 57
Table 7-5
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day.
-Refer to Table 7-5. If the market price of an orange is $0.40, then
A) 6 oranges are demanded per day, and consumer surplus amounts to $4.95.
B) 6 oranges are demanded per day, and consumer surplus amounts to $5.10.
C) 7 oranges are demanded per day, and consumer surplus amounts to $5.30.
D) 7 oranges are demanded per day, and consumer surplus amounts to $5.15.
Free
Multiple Choice
Q 58Q 58
Table 7-5
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day.
-Refer to Table 7-5. If the market price of an orange increases from $0.80 to $1.05, then consumer surplus
A) increases by $0.75.
B) decreases by $0.95.
C) decreases by $0.75.
D) decreases by $1.00.
Free
Multiple Choice
Q 59Q 59
Table 7-5
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day.
-Refer to Table 7-5. If the market price of an orange increases from $0.70 to $1.40, then consumer surplus
A) increases by $2.60.
B) decreases by $0.70.
C) decreases by $2.50.
D) decreases by $2.60.
Free
Multiple Choice
Q 60Q 60
Table 7-5
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day.
-Refer to Table 7-5. Who experiences the largest loss of consumer surplus when the price of an orange increases from $0.70 to $1.40?
A) Allison
B) Bob
C) Charisse
D) All three individuals experience the same loss of consumer surplus.
Free
Multiple Choice
Q 61Q 61
Table 7-5
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day.
-Refer to Table 7-5. Who experiences the largest gain in consumer surplus when the price of an orange decreases from $1.05 to $0.75?
A) Allison
B) Bob
C) Charisse
D) Allison and Bob experience the same gain in consumer surplus, and Charisse's gain is zero.
Free
Multiple Choice
Q 62Q 62
Table 7-5
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day.
-Refer to Table 7-5. Which of the following statements is correct?
A) Neither Bob's consumer surplus nor Charisse's consumer surplus can exceed Allison's consumer surplus, for any price of an orange.
B) All three individuals will buy at least one orange only if the price of an orange is less than $0.25.
C) If the price of an orange is $0.60, then consumer surplus is $4.90.
D) All of the above are correct.
Free
Multiple Choice
Q 63Q 63
Table 7-6
For each of three potential buyers of apples, the table displays the willingness to pay for the first three apples of the day. Assume Xavier, Yadier, and Zavi are the only three buyers of apples, and only three apples can be supplied per day.
-Refer to Table 7-6. If the market price of an apple is $1.40, then the market quantity of apples demanded per day is
A) 1.
B) 2.
C) 3.
D) 4.
Free
Multiple Choice
Q 64Q 64
Table 7-6
For each of three potential buyers of apples, the table displays the willingness to pay for the first three apples of the day. Assume Xavier, Yadier, and Zavi are the only three buyers of apples, and only three apples can be supplied per day.
-Refer to Table 7-6. If the market price of an apple is $1.40, then consumer surplus amounts to
A) $0.60.
B) $1.20.
C)$1.40.
D) $3.40
Free
Multiple Choice
Q 65Q 65
Table 7-6
For each of three potential buyers of apples, the table displays the willingness to pay for the first three apples of the day. Assume Xavier, Yadier, and Zavi are the only three buyers of apples, and only three apples can be supplied per day.
-Refer to Table 7-6. If the market price of an apple increases from $1.40 to $1.60, then consumer surplus
A) decreases by $0.15.
B) decreases by $0.30.
C) decreases by $0.45.
D) increases by $0.15.
Free
Multiple Choice
Q 66Q 66
Table 7-7
-Refer to Table 7-7. You have an extra ticket 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 ticket. Who makes the winning bid, and what does he offer to pay for the ticket?
A) Michael; $501
B) Michael; more than $400 but less than or equal to $500
C) Earvin; $400
D) Earvin; more than $350 but less than or equal to $400
Free
Multiple Choice
Q 67Q 67
Table 7-7
-Refer to Table 7-7. You have an extra ticket 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 ticket. Michael bids $410 for the ticket, and you sell him the ticket. What is his consumer surplus?
A) $410
B) $90
C) $10
D) 0
Free
Multiple Choice
Q 68Q 68
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?
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 $300
Free
Multiple Choice
Q 69Q 69
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. Michael and Earvin each offer to pay $360 for a ticket, and you sell them the two tickets. What is the total consumer surplus in the market?
A) $720
B) $180
C) $140
D) $40
Free
Multiple Choice
Q 70Q 70
Table 7-7
-Refer to Table 7-7. You have four 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 offer to sell the tickets for $400. How many tickets do you sell, and what is the total consumer surplus in the market?
A) one ticket; $100
B) two tickets; $100
C) two tickets; $0
D) three tickets; $0
Free
Multiple Choice
Q 71Q 71
Table 7-7
-Refer to Table 7-7. You have four 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 offer to sell the tickets for $325. How many tickets do you sell, and what is the total consumer surplus in the market?
A) one ticket; $175
B) two tickets; $225
C) three tickets; $225
D) three tickets; $275
Free
Multiple Choice
Q 72Q 72
Table 7-7
-Refer to Table 7-7. You are selling 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. Which of the following graphs represents the market demand curve?
A)
B)
C)
D)
Free
Multiple Choice
Q 73Q 73
Table 7-9
During the last two days, Chad purchased a latte from two different stores. The table below shows Chad's willingness to pay on each day and his consumer surplus from each purchase.
-Refer to Table 7-9. The price that Chad paid for a latte on the first day is
A) $3.75.
B) $6.25.
C) $5.00.
D) $5.50.
Free
Multiple Choice
Q 74Q 74
Table 7-9
During the last two days, Chad purchased a latte from two different stores. The table below shows Chad's willingness to pay on each day and his consumer surplus from each purchase.
-Refer to Table 7-9. The price that Chad paid for a latte on the second day is
A) $0.25 less than the amount he paid on the first day.
B) $1.00 less than the amount he paid on the first day.
C) $1.50 less than the amount he paid on the first day.
D) $0.50 less than the amount he paid on the first day.
Free
Multiple Choice
Q 75Q 75
Table 7-10
The only four consumers in a market have the following willingness to pay for a good:
Buyer Willingness to Pay
-Refer to Table 7-10. If the market price for the good is $20, who will purchase the good?
A) Danita only
B) Carolyn and Danita only
C) Ashleigh, Barb, and Carolyn only
D) All four buyers would purchase the good.
Free
Multiple Choice
Q 76Q 76
Table 7-10
The only four consumers in a market have the following willingness to pay for a good:
Buyer Willingness to Pay
-Refer to Table 7-10. If there is only one unit of the good available for purchase, and if the buyers bid against each other for the right to purchase it, then the good will sell for
A) $12 or slightly less
B) $15 or slightly more
C) $19 or slightly more
D) $27 or slightly less
Free
Multiple Choice
Q 77Q 77
Table 7-10
The only four consumers in a market have the following willingness to pay for a good:
Buyer Willingness to Pay
-Refer to Table 7-10. If there is only one unit of the good available for purchase, and if the buyers bid against each other for the right to purchase it, then the consumer surplus will be
A) $0 or slightly more.
B) $3 or slightly less.
C) $4 or slightly more.
D) $8 or slightly less.
Free
Multiple Choice
Q 78Q 78
You are offered a free ticket to see the Chicago Cubs play the Chicago White Sox at Wrigley Field. Assume the ticket has no resale value. Willie Nelson is performing on the same night, and his concert is your next-best alternative activity. Tickets to see Willie Nelson cost $40. On any given day, you would be willing to pay up to $50 to see and hear Willie Nelson perform. Assume there are no other costs of seeing either event. Based on this information, at a minimum, how much would you have to value seeing the Cubs play the White Sox to accept the ticket and go to the game?
A) $0
B) $10
C) $40
D) $50
Free
Multiple Choice
Q 79Q 79
A drought in California destroys many red grapes. As a result of the drought, the consumer surplus in the market for red grapes
A) increases, and the consumer surplus in the market for red wine increases.
B) increases, and the consumer surplus in the market for red wine decreases.
C) decreases, and the consumer surplus in the market for red wine increases.
D) decreases, and the consumer surplus in the market for red wine decreases.
Free
Multiple Choice
Q 80Q 80
Bob purchases a book for $6, and his consumer surplus is $2. How much is Bob willing to pay for the book?
A) $2.
B) $6.
C) $8.
D) $4.
Free
Multiple Choice
Q 81Q 81
Bob purchases a book, and his consumer surplus is $3. If Bob is willing to pay $8 for the book, then the price of the book must be
A) $3.
B) $8.
C) $5.
D) $11.
Free
Multiple Choice
Q 82Q 82
Chuck would be willing to pay $20 to attend a dog show, but he buys a ticket for $15. Chuck values the dog show at
A) $5.
B) $15.
C) $20.
D) $35.
Free
Multiple Choice
Q 83Q 83
If a consumer places a value of $15 on a particular good and if the price of the good is $17, then the
A) consumer has consumer surplus of $2 if he or she buys the good.
B) consumer does not purchase the good.
C) market is not a competitive market.
D) price of the good will fall due to market forces.
Free
Multiple Choice
Q 84Q 84
If a consumer places a value of $20 on a particular good and if the price of the good is $25, then the
A) consumer has consumer surplus of $5 if he buys the good.
B) consumer does not purchase the good.
C) price of the good will rise due to market forces.
D) market is out of equilibrium.
Free
Multiple Choice
Q 85Q 85
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
A) $4.
B) $16.
C) $20.
D) $36.
Free
Multiple Choice
Q 86Q 86
Kelly is willing to pay $5.20 for a gallon of gasoline. The price of gasoline at her local gas station is $3.80. If she purchases ten gallons of gasoline, then Kelly's consumer surplus is
A) $1.40.
B) $14.
C) $3.80.
D) $52.
Free
Multiple Choice
Q 87Q 87
Brock is willing to pay $400 for a new suit, but he is able to buy the suit for $250. His consumer surplus is
A) $650.
B) $150.
C) $250.
D) $400.
Free
Multiple Choice
Q 88Q 88
Josh is willing to pay $500 for a set of tire, but he is able to pay $300 at the local tire store. His consumer surplus is
A) $800.
B) $300.
C) $200.
D) $500.
Free
Multiple Choice
Q 89Q 89
Suppose Lauren, Leslie and Lydia all purchase bulletin boards for their rooms for $15 each. Lauren's willingness to pay was $35, Leslie's willingness to pay was $25, and Lydia's willingness to pay was $30. Total consumer surplus for these three would be
A) $15.
B) $30.
C) $45.
D) $90.
Free
Multiple Choice
Q 90Q 90
Suppose Brent, Callie, and Danielle each purchase a particular type of electric pencil sharpener at a price of $20. Brent's willingness to pay was $22, Callie's willingness to pay was $25, and Danielle's willingness to pay was $30.
Which of the following statements is correct?
A) Had the price of the pencil sharpener been $24 rather than $20, only Danielle would have been a buyer.
B) Brent's consumer surplus is the smallest of the three individual consumer surpluses.
C) For the three individuals together, consumer surplus amounts to $60.
D) The fact that all three individuals paid $20 for the same type of pencil sharpener indicates that each one placed the same value on that pencil sharpener.
Free
Multiple Choice
Q 91Q 91
Suppose Katie, Kendra, and Kristen each purchase a particular type of cell phone at a price of $80. Katie's willingness to pay was $100, Kendra's willingness to pay was $95, and Kristen's willingness to pay was $80. Which of the following statements is correct?
A) For the three individuals together, consumer surplus amounts to $35.
B) Having bought the cell phone, Kristen is better off than she would have been had she not bought it.
C) Had the price of the cell phone been $95 rather than $80, Katie and Kendra definitely would have been buyers and Kristen definitely would not have been a buyer.
D) The fact that all three individuals paid $80 for the same type of cell phone indicates that each one placed the same value on that cell phone.
Free
Multiple Choice
Q 92Q 92
Celine buys a new MP3 player for $90. She receives consumer surplus of $15 on her purchase if her willingness to pay is
A) $15.
B) $90
C) $105.
D) $75.
Free
Multiple Choice
Q 93Q 93
Abraham drinks Mountain Dew. He can buy as many cans of Mountain Dew as he wishes at a price of $0.55 per can. On a particular day, he is willing to pay $0.95 for the first can, $0.80 for the second can, $0.60 for the third can, and $0.40 for the fourth can. Assume Abraham is rational in deciding how many cans to buy. His consumer surplus is
A) $0.50.
B) $0.60.
C) $0.70.
D) $1.00.
Free
Multiple Choice
Q 94Q 94
Janine would be willing to pay $50 to see Les Misérables, but she buys a ticket for only $30. Janine values the performance at
A) $20.
B) $30.
C) $50.
D) $80.
Free
Multiple Choice
Q 95Q 95
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
A) $8.75.
B) $5.00.
C) $3.75.
D) $1.25.
Free
Multiple Choice
Q 96Q 96
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?
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.
Free
Multiple Choice
Q 97Q 97
Henry is willing to pay 45 cents, and Janine is willing to pay 55 cents, for 1 pound of bananas. When the price of bananas falls from 50 cents a pound to 40 cents a pound,
A) Henry experiences an increase in consumer surplus, but Janine does not.
B) Janine experiences an increase in consumer surplus, but Henry does not.
C) both Janine and Henry experience an increase in consumer surplus.
D) neither Janine nor Henry experiences an increase in consumer surplus.
Free
Multiple Choice
Q 98Q 98
Alex is willing to pay $10, and Bella is willing to pay $8, for 1 pound of ribeye steak. When the price of ribeye steak increases from $9 to $11,
A) Alex experiences a decrease in consumer surplus, but Bella does not.
B) Bella experiences a decrease in consumer surplus, but Alex does not.
C) both Bella and Alex experience a decrease in consumer surplus.
D) neither Bella nor Alex experiences a decrease in consumer surplus.
Free
Multiple Choice
Q 99Q 99
Pat bought a new car for $15,500 but was willing to pay $24,000. The consumer surplus is
A) $8,500.
B) $15,500.
C) $24,000.
D) $39,500.
Free
Multiple Choice
Q 100Q 100
Dawn's bridal boutique is having a sale on evening dresses. The increase in consumer surplus comes from the benefit of the lower prices to
A) only existing customers who now get lower prices on the gowns they were already planning to purchase.
B) only new customers who enter the market because of the lower prices.
C) both existing customers who now get lower prices on the gowns they were already planning to purchase and new customers who enter the market because of the lower prices.
D) Consumer surplus does not increase; it decreases.
Free
Multiple Choice
Q 101Q 101
Jeff decides that he would pay as much as $2,000 for a new laptop computer. He buys the computer and realizes a consumer surplus of $300. How much did Jeff pay for his computer?
A) $300.
B) $1,700.
C) $2,000.
D) $2,300.
Free
Multiple Choice
Q 102Q 102
Billie Jo values a stainless steel dishwasher for her new house at $500, but she succeeds in buying one for $425. Billie Jo's willingness to pay for the dishwasher is
A) $150.
B) $425.
C) $500.
D) $850.
Free
Multiple Choice
Q 103Q 103
Denise values a stainless steel dishwasher for her new house at $500, but she succeeds in buying one for $350. Denise's consumer surplus is
A) $150.
B)$350.
C) $500.
D) $850.
Free
Multiple Choice
Q 104Q 104
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
A) $500.
B) $3,000.
C) $3,500.
D) $6,500.
Free
Multiple Choice
Q 105Q 105
Michael values a stainless steel refrigerator for his new house at $3,500, but he succeeds in buying one for $3,000. Michael's consumer surplus is
A) $500.
B) $3,000.
C) $3,500.
D) $6,500.
Free
Multiple Choice
Q 106Q 106
Denise values a stainless steel dishwasher for her new house at $500. The actual price of the dishwasher is $650. Denise
A) buys the dishwasher, and on her purchase she experiences a consumer surplus of $150.
B) buys the dishwasher, and on her purchase she experiences a consumer surplus of $-150.
C) does not buy the dishwasher, and on her purchase she experiences a consumer surplus of $150.
D) does not buy the dishwasher, and on her purchase she experiences a consumer surplus of $0.
Free
Multiple Choice
Q 107Q 107
Ray buys a new tractor for $118,000. He receives consumer surplus of $13,000 on his purchase. Ray's willingness to pay is
A) $13,000.
B) $105,000.
C) $118,000.
D) $131,000.
Free
Multiple Choice
Q 108Q 108
Jeff decides that he would pay as much as $3,000 for a new laptop computer. He buys the computer and realizes consumer surplus of $700. How much did Jeff pay for his computer?
A) $700
B) $2,300
C) $3,000
D) $3,700
Free
Multiple Choice
Q 109Q 109
Cameron visits a sporting goods store to buy a new set of golf clubs. He is willing to pay $750 for the clubs but buys them on sale for $575. Cameron's consumer surplus from the purchase is
A) $175.
B) $575.
C) $750.
D)$1,325.
Free
Multiple Choice
Q 110Q 110
If the price a consumer pays for a product is equal to a consumer's willingness to pay, then the consumer surplus relevant to that purchase is
A) zero.
B) negative, and the consumer would not purchase the product.
C) positive, and the consumer would purchase the product.
D) There is not enough information given to answer this question.
Free
Multiple Choice
Q 111Q 111
Suppose there is an early freeze in California that reduces the size of the lemon crop. What happens to consumer surplus in the market for lemons?
A) Consumer surplus increases.
B) Consumer surplus decreases.
C) Consumer surplus is not affected by this change in market forces.
D) We would have to know whether the demand for lemons is elastic or inelastic to make this determination.
Free
Multiple Choice
Q 112Q 112
Suppose your own demand curve for tomatoes slopes downward. Suppose also that, for the last tomato you bought this week, you paid a price exactly equal to your willingness to pay. Then
A) you should buy more tomatoes before the end of the week.
B) you already have bought too many tomatoes this week.
C) your consumer surplus on the last tomato you bought is zero.
D) your consumer surplus on all of the tomatoes you have bought this week is zero.
Free
Multiple Choice
Q 113Q 113
Suppose the market demand curve for a good passes through the point (quantity demanded = 100, price = $25). If there are five buyers in the market, then
A) the marginal buyer's willingness to pay for the 100th unit of the good is $25.
B) the sum of the five buyers' willingness to pay for the 100th unit of the good is $25.
C) the average of the five buyers' willingness to pay for the 100th unit of the good is $25.
D) all of the five buyers are willing to pay at least $25 for the 100th unit of the good.
Free
Multiple Choice
Q 114Q 114
If the cost of producing sofas decreases, then consumer surplus in the sofa market will
A) increase.
B) decrease.
C) remain constant.
D) increase for some buyers and decrease for other buyers.
Free
Multiple Choice
Q 115Q 115
All else equal, what happens to consumer surplus if the price of a good increases?
A) Consumer surplus increases.
B) Consumer surplus decreases.
C) Consumer surplus is unchanged.
D) Consumer surplus may increase, decrease, or remain unchanged.
Free
Multiple Choice
Q 116Q 116
All else equal, what happens to consumer surplus if the price of a good decreases?
A) Consumer surplus increases.
B) Consumer surplus decreases.
C) Consumer surplus is unchanged.
D) Consumer surplus may increase, decrease, or remain unchanged.
Free
Multiple Choice
Q 117Q 117
Which of the following will cause an increase in consumer surplus?
A) an increase in the production cost of the good
B) a technological improvement in the production of the good
C) a decrease in the number of sellers of the good
D) the imposition of a binding price floor in the market
Free
Multiple Choice
Q 118Q 118
Which of the following will cause a decrease in consumer surplus?
A) an increase in the number of sellers of the good
B) a decrease in the production cost of the good
C) sellers expect the price of the good to be lower next month
D) the imposition of a binding price floor in the market
Free
Multiple Choice
Q 119Q 119
When there is a technological advance in the pork industry, consumer surplus in that market will
A) increase.
B) decrease.
C) not change, since technology affects producers and not consumers.
D) not change, since consumers' willingness to pay is unaffected by the technological advance.
Free
Multiple Choice
Q 120Q 120
If the price of oak lumber increases, what happens to consumer surplus in the market for oak cabinets?
A) Consumer surplus increases.
B) Consumer surplus decreases.
C) Consumer surplus will not change consumer surplus; only producer surplus changes.
D) Consumer surplus depends on what event led to the increase in the price of oak lumber.
Free
Multiple Choice
Q 121Q 121
Which of the following is not true when the price of a good or service falls?
A) Buyers who were already buying the good or service are better off.
B) Some new buyers, who are now willing to buy, enter the market.
C) The total consumer surplus in the market increases.
D) The total value of purchases before and after the price change is the same.
Free
Multiple Choice
Q 122Q 122
When the demand for a good increases and the supply of the good remains unchanged, consumer surplus
A) decreases.
B) is unchanged.
C) increases.
D) may increase, decrease, or remain unchanged.
Free
Multiple Choice
Q 123Q 123
Suppose televisions are a normal good and buyers of televisions experience a decrease in income. As a result, consumer surplus in the television market
A) decreases.
B) is unchanged.
C) increases.
D) may increase, decrease, or remain unchanged.
Free
Multiple Choice
Q 124Q 124
Motor oil and gasoline are complements. If the price of motor oil increases, consumer surplus in the gasoline market
A) decreases.
B) is unchanged.
C) increases.
D) may increase, decrease, or remain unchanged.
Free
Multiple Choice
Q 125Q 125
Dallas buys strawberries, and he would be willing to pay more than he now pays. Suppose that Dallas has a change in his tastes such that he values strawberries more than before. If the market price is the same as before, then
A) Dallas's consumer surplus would be unaffected.
B) Dallas's consumer surplus would increase.
C) Dallas's consumer surplus would decrease.
D) Dallas would be wise to buy fewer strawberries than before.
Free
Multiple Choice
Q 126Q 126
Figure 7-1
-Refer to Figure 7-1. If the price of the good is $250, then consumer surplus amounts to
A) $50.
B) $100.
C) $150.
D) $200.
Free
Multiple Choice
Q 127Q 127
Figure 7-1
-Refer to Figure 7-1. If the price of the good is $150, then consumer surplus amounts to
A) $150.
B) $200.
C) $250.
D) $300.
Free
Multiple Choice
Q 128Q 128
Figure 7-1
-Refer to Figure 7-1. If the price of the good is $50, then consumer surplus amounts to
A) $400.
B) $500.
C) $600.
D) $750.
Free
Multiple Choice
Q 129Q 129
Figure 7-1
-Refer to Figure 7-1. If the price of the good is $200, then
A) consumer surplus is $150.
B) consumer surplus is $650.
C) producer surplus is $650.
D) producer surplus is $750.
Free
Multiple Choice
Q 130Q 130
Figure 7-1
-Refer to Figure 7-1. The value of the good to consumers minus the cost of the good to consumers amounts to $325 if the price of the good is
A) $200.
B) $150.
C) $125 .
D) $100.
Free
Multiple Choice
Q 131Q 131
Figure 7-2
-Refer to Figure 7-2. If the price of the good is $100, then consumer surplus amounts to
A) $50.
B) $75.
C) $100.
D) $125.
Free
Multiple Choice
Q 132Q 132
Figure 7-2
-Refer to Figure 7-2. If the price of the good is $80, then consumer surplus amounts to
A) $110.
B) $135.
C) $160 .
D) $185.
Free
Multiple Choice
Q 133Q 133
Figure 7-3
-Refer to Figure 7-3. When the price is P1, consumer surplus is
A) A.
B) A+B.
C) A+B+C.
D) A+B+D.
Free
Multiple Choice
Q 134Q 134
Figure 7-3
-Refer to Figure 7-3. When the price is P2, consumer surplus is
A) A.
B) B.
C) A+c.
D) A+B+d.
Free
Multiple Choice
Q 135Q 135
Figure 7-3
-Refer to Figure 7-3. When the price rises from P1 to P2, consumer surplus
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 d.
Free
Multiple Choice
Q 136Q 136
Figure 7-3
-Refer to Figure 7-3. Area C represents the
A) decrease in consumer surplus that results from a downward-sloping demand curve.
B) consumer surplus to new consumers who enter the market when the price falls from P2 to P1.
C) increase in producer surplus when quantity sold increases from Q2 to Q1.
D) decrease in consumer surplus to each consumer in the market when the price increases from P1 to P2.
Free
Multiple Choice
Q 137Q 137
Figure 7-3
-Refer to Figure 7-3. When the price rises from P1 to P2, which of the following statements is not true?
A) The buyers who still buy the good are worse off because they now pay more.
B) Some buyers leave the market because they are not willing to buy the good at the higher price.
C) Buyers place a higher value on the good after the price increase.
D) Consumer surplus in the market falls.
Free
Multiple Choice
Q 138Q 138
Figure 7-4
-Refer to Figure 7-4. Which area represents consumer surplus at a price of P1?
A) BDF
B) AFG
C) ABDG
D) ABC
Free
Multiple Choice
Q 139Q 139
Figure 7-4
-Refer to Figure 7-4. Which area represents consumer surplus at a price of P2?
A) BDF
B) AFG
C) ABDG
D) ABC
Free
Multiple Choice
Q 140Q 140
Figure 7-4
-Refer to Figure 7-4. Which area represents the increase in consumer surplus when the price falls from P1 to P2?
A) BDF
B) AFG
C) ABC
D) ABDG
Free
Multiple Choice
Q 141Q 141
Figure 7-4
-Refer to Figure 7-4. When the price falls from P1 to P2, which area represents the increase in consumer surplus to existing buyers?
A) BDF
B) AFG
C) BCGD
D) ABC
Free
Multiple Choice
Q 142Q 142
Figure 7-4
-Refer to Figure 7-4. When the price falls from P1 to P2, which area represents the increase in consumer surplus to new buyers entering the market?
A) BDF
B) AFG
C) BCGD
D) ABC
Free
Multiple Choice
Q 143Q 143
Figure 7-5
-Refer to Figure 7-5. If the price of the good is $6, then consumer surplus is
A) $16.
B) $24.
C) $30.
D) $36.
Free
Multiple Choice
Q 144Q 144
Figure 7-5
-Refer to Figure 7-5. If the price of the good is $12, then consumer surplus is
A) $11.
B) $9.
C) $13.
D) $16.
Free
Multiple Choice
Q 145Q 145
Figure 7-6
-Refer to Figure 7-6. At the equilibrium price, consumer surplus is
A) $1,600.
B) $800.
C) $1,400.
D) $700.
Free
Multiple Choice
Q 146Q 146
Figure 7-6
-Refer to Figure 7-6. If the government imposes a price floor of $110 in this market, then consumer surplus will decrease by
A) $200.
B) $400.
C) $600.
D) $800.
Free
Multiple Choice
Q 147Q 147
Figure 7-7
-Refer to Figure 7-7. What is the consumer surplus if the price is $100?
A) $2,500
B) $5,000
C) $10,000
D) $20,000
Free
Multiple Choice
Q 148Q 148
Figure 7-7
-Refer to Figure 7-7. What happens to the consumer surplus if the price rises from $100 to $150?
A) The new consumer surplus is half of the original consumer surplus.
B) The new consumer surplus is 25 percent of the original consumer surplus.
C) The new consumer surplus is double the original consumer surplus.
D) The new consumer surplus is triple the original consumer surplus.
Free
Multiple Choice
Q 149Q 149
Figure 7-8
-Refer to Figure 7-8. At the equilibrium price, consumer surplus is
A) $1,050.
B) $1,225.
C) $1,575.
D) $2,450.
Free
Multiple Choice
Q 150Q 150
Figure 7-8
-Refer to Figure 7-8. If the government imposes a price floor of $100 in this market, then consumer surplus will decrease by
A) $150.
B) $325.
C) $650.
D) $675.
Free
Multiple Choice
Q 151Q 151
Figure 7-8
-Refer to Figure 7-8. If the government imposes a price ceiling of $80 in this market, then, assuming those with the highest willingness to pay purchase the good, consumer surplus will be
A) $900.
B) $1,200.
C) $1,500.
D) $1,600.
Free
Multiple Choice
Q 152Q 152
When the supply of a good decreases and the demand for the good remains unchanged, consumer surplus
A) decreases.
B) is unchanged.
C) increases.
D) may increase, decrease, or remain unchanged.
Free
Multiple Choice
Q 153Q 153
Which of the following is true when the price of a good or service rises?
A) Buyers who were already buying the good or service are better off.
B) Some buyers exit the market.
C) The total consumer surplus in the market increases.
D) The total value of purchases before and after the price change is the same.
Free
Multiple Choice
Q 154Q 154
Oil is used to produce gasoline. If the price of oil increases, consumer surplus in the gasoline market
A) decreases.
B) is unchanged.
C) increases.
D) may increase, decrease, or remain unchanged.
Free
Multiple Choice
Q 155Q 155
What happens to consumer surplus in the iPod market if iPods are normal goods and buyers of iPods experience an increase in income?
A) Consumer surplus decreases.
B) Consumer surplus remains unchanged.
C) Consumer surplus increases.
D) Consumer surplus may increase, decrease, or remain unchanged.
Free
Multiple Choice
Q 156Q 156
As a result of a decrease in price,
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.
Free
Multiple Choice
Q 157Q 157
Economists normally assume people's preferences should be
A) respected.
B) adjusted.
C) overruled.
D) ignored.
Free
Multiple Choice
Q 158Q 158
Consumer surplus is a good measure of economic welfare if policymakers want to
A) maximize total benefit.
B) minimize deadweight loss.
C) respect the preferences of sellers.
D) respect the preferences of buyers.
Free
Multiple Choice
Q 159Q 159
When policymakers are considering a particular action, they can use consumer surplus as a(n)
A) objective measure of the benefits to buyers as determined by policymakers.
B) measure of the benefits to buyers as the buyers perceive them.
C) potentially flawed measure of the benefits to buyers if the buyers are not rational.
D) Both b) and c) are correct.
Free
Multiple Choice
Q 160Q 160
A seller's opportunity cost measures the
A) value of everything she must give up to produce a good.
B) amount she is paid for a good minus her cost of providing it.
C) consumer surplus.
D) out of pocket expenses to produce a good but not the value of her time.
Free
Multiple Choice
Q 161Q 161
Cost is a measure of the
A) seller's willingness to sell.
B) seller's producer surplus.
C) producer shortage.
D) seller's willingness to buy.
Free
Multiple Choice
Q 162Q 162
Justin builds fences for a living. Justin's outofpocket expenses (for wood, paint, etc.) plus the value that he places
A) producer surplus.
B) producer deficit.
C) cost of building fences.
D) profit.
Free
Multiple Choice
Q 163Q 163
A supply curve can be used to measure producer surplus because it reflects
A) the actions of sellers.
B) quantity supplied.
C) sellers' costs.
D) the amount that will be purchased by consumers in the market.
Free
Multiple Choice
Q 164Q 164
A seller is willing to sell a product only if the seller receives a price that is at least as great as the
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.
Free
Multiple Choice
Q 165Q 165
Producer surplus is
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.
Free
Multiple Choice
Q 166Q 166
Producer surplus measures the
A) benefits to sellers of participating in a market.
B) costs to sellers of participating in a market.
C) price that buyers are willing to pay for sellers' output of a good or service.
D) benefit to sellers of producing a greater quantity of a good or service than buyers demand.
Free
Multiple Choice
Q 167Q 167
A seller's willingness to sell is
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.
Free
Multiple Choice
Q 168Q 168
Caroline sharpens knives in her spare time for extra income. Buyers of her service are willing to pay $2.95 per knife for as many knives as Caroline is willing to sharpen. On a particular day, she is willing to sharpen the first knife for $2.00, the second knife for $2.25, the third knife for $2.75, and the fourth knife for $3.50. Assume Caroline is rational in deciding how many knives to sharpen. Her producer surplus is
A) $0.95.
B) $1.15.
C) $1.30.
D) $1.85.
Free
Multiple Choice
Q 169Q 169
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
A) $40.
B) $64.
C) $12.
D) $56.
Free
Multiple Choice
Q 170Q 170
Tom tunes pianos in his spare time for extra income. Buyers of his service are willing to pay $155 per tuning. One particular week, Tom is willing to tune the first piano for $120, the second piano for $125, the third piano for $140, and the fourth piano for $160. Assume Tom is rational in deciding how many pianos to tune. His producer surplus is
A) $80.
B) $95.
C) $75.
D) $60.
Free
Multiple Choice
Q 171Q 171
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
A) $-15.
B) $20.
C) $30.
D) $75.
Free
Multiple Choice
Q 172Q 172
George produces cupcakes. His production cost is $10 per dozen. He sells the cupcakes for $16 per dozen. His producer surplus per dozen cupcakes is
A) $6.
B) $10.
C) $16.
D) $26.
Free
Multiple Choice
Q 173Q 173
Donald produces nails at a cost of $200 per ton. If he sells the nails for $350 per ton, his producer surplus per ton is
A) $150.
B) $200.
C) $350.
D) $550.
Free
Multiple Choice
Q 174Q 174
If Martin sells a shirt for $40, and his producer surplus from the sale is $8, his cost must have been
A) $32.
B) $48.
C) $8.
D) $40.
Free
Multiple Choice
Q 175Q 175
Ronnie operates a lawn-care service. On each day, the cost of mowing the first lawn is $15, the cost of mowing the second lawn is $25, and the cost of mowing the third lawn is $40. His producer surplus on the first three lawns of the day is $100. If Ronnie charges all customers the same price for lawn mowing, that price is
A) $20.
B) $60.
C) $80.
D) $180.
Free
Multiple Choice
Q 176Q 176
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.
Free
Multiple Choice
Q 177Q 177
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.
Free
Multiple Choice
Q 178Q 178
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.
Free
Multiple Choice
Q 179Q 179
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.
Free
Multiple Choice
Q 180Q 180
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.
Free
Multiple Choice
Q 181Q 181
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.
Free
Multiple Choice
Q 182Q 182
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.
Free
Multiple Choice
Q 183Q 183
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.
Free
Multiple Choice
Q 184Q 184
Table 7-11
The following table represents the costs of five possible sellers.
-Refer to Table 7-11. If the market price is $1,000, the producer surplus in the market is
A) $1000.
B) $300.
C) $1,700.
D) $700.
Free
Multiple Choice
Q 185Q 185
Table 7-11
The following table represents the costs of five possible sellers.
-Refer to Table 7-11. If the market price is $1,200, the producer surplus in the market is
A) $100.
B) $800.
C) $400.
D) $500.
Free
Multiple Choice
Q 186Q 186
Table 7-11
The following table represents the costs of five possible sellers.
-Refer to Table 7-11. 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.
Free
Multiple Choice
Q 187Q 187
Table 7-11
The following table represents the costs of five possible sellers.
-Refer to Table 7-11. 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.
Free
Multiple Choice
Q 188Q 188
Table 7-11
The following table represents the costs of five possible sellers.
-Refer to Table 7-11. 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.
Free
Multiple Choice
Q 189Q 189
Table 7-11
The following table represents the costs of five possible sellers.
-Refer to Table 7-11. 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
Free
Multiple Choice
Q 190Q 190
Table 7-11
The following table represents the costs of five possible sellers.
-Refer to Table 7-11. 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.
Free
Multiple Choice
Q 191Q 191
Table 7-11
The following table represents the costs of five possible sellers.
-Refer to Table 7-11. 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.
Free
Multiple Choice
Q 192Q 192
Table 7-11
The following table represents the costs of five possible sellers.
-Refer to Table 7-11. 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
Free
Multiple Choice
Q 193Q 193
Table 7-12
The only four producers in a market have the following costs:
-Refer to Table 7-12. 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.
Free
Multiple Choice
Q 194Q 194
Table 7-12
The only four producers in a market have the following costs:
-Refer to Table 7-12. 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.
Free
Multiple Choice
Q 195Q 195
Table 7-12
The only four producers in a market have the following costs:
-Refer to Table 7-12. 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.
Free
Multiple Choice
Q 196Q 196
Table 7-12
The only four producers in a market have the following costs:
-Refer to Table 7-12. If Evan, Selena, Angie, and Kris sell the good, and the resulting producer surplus is $700, then the price must have been
A) $200.
B) $300.
C) $500.
D) $700.
Free
Multiple Choice
Q 197Q 197
Table 7-13
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
-Refer to Table 7-13. You wish to purchase 10 piano lessons, so you take bids from each of the sellers. You will not accept a bid below a seller's cost because you are concerned that the seller will not provide all 10 lessons. What bid will you accept?
A) $351
B) $251
C) $249
D) $199
Free
Multiple Choice
Q 198Q 198
Table 7-13
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
-Refer to Table 7-13. You wish to purchase 10 piano lessons for yourself and for your brother, so you take bids from each of the sellers. You will take lessons at the same time, so one teacher cannot provide lessons to both of you. You must pay the same price for both sets of lessons, and you will not accept a bid below a seller's cost because you are concerned that the seller will not provide all 10 lessons. What bid will you accept?
A) $351
B) $349
C) $201
D) $199
Free
Multiple Choice
Q 199Q 199
Table 7-13
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
-Refer to Table 7-13. The equilibrium market price for 10 piano lessons is $400. What is the total producer surplus in the market?
A) $0
B) $300
C) $400
D) $700
Free
Multiple Choice
Q 200Q 200
Table 7-13
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
-Refer to Table 7-13. The equilibrium market price for 10 piano lessons is $300. What is the total producer surplus in the market?
Free
Multiple Choice
Q 201Q 201
Table 7-13
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
-Refer to Table 7-13. You wish to purchase 10 piano lessons, so you take bids from each of the sellers. The bids are required to be rounded to the nearest dollar. You will not accept a bid below a seller's cost because you are concerned that the seller will not provide all 10 lessons. Your parents have given you $450 to spend on piano lessons. You believe that the sellers with higher opportunity costs offer higher quality lessons. You want the highest quality lessons that you can afford, but you can spend any remaining money on dinner with friends. From whom will you take lessons, and how much money will you spend?
A) Peter; $450
B) Cindy; $450
C) Greg; $401
D) Cindy; $401
Free
Multiple Choice
Q 202Q 202
Table 7-14
The only four producers in a market have the following costs:
-Refer to Table 7-14. If the sellers bid against each other for the right to sell the good to a single consumer, then the good will sell for
A) $30 or slightly more.
B) $40 or slightly less.
C) $55 or slightly less.
D) $65 or slightly less.
Free
Multiple Choice
Q 203Q 203
Table 7-14
The only four producers in a market have the following costs:
-Refer to Table 7-14. If the sellers bid against each other for the right to sell the good to a single consumer, then the producer surplus will be
A) $0 or slightly more.
B) $5 or slightly less.
C) $10 or slightly less.
D) $25 or slightly less.
Free
Multiple Choice
Q 204Q 204
Table 7-14
The only four producers in a market have the following costs:
-Refer to Table 7-14. If Abbey, Bev, and Carl sell the good, and the resulting producer surplus is $55 altogether, then the price must have been
A) $40.
B) $50.
C) $60.
D) $70.
Free
Multiple Choice
Q 205Q 205
Table 7-15
-Refer to Table 7-15. You want to hire a professional photographer to take pictures of your family. The table shows the costs of the four potential sellers in the local photography market. You take bids from the sellers. Who offers the winning bid, and what does he offer to charge for the photography session?
A) Steve; more than $400 but less than $450
B) Steve; $399
C) LeBron; more than $700
D) LeBron; more than $600 but less than $700
Free
Multiple Choice
Q 206Q 206
Table 7-15
-Refer to Table 7-15. You and your best friend want to hire a professional photographer to take pictures of your two families. The table shows the costs of the four potential sellers in the local photography market. You and your friend take bids from the sellers. Who offers the two winning bids, and what do they offer to charge for the photography sessions?
A) LeBron and Kobe; more than $450 but less than $600
B) Kevin and Steve; more than $450 but less than $600
C) LeBron and Kobe; more than $700
D) Kevin and Steve; less than $400
Free
Multiple Choice
Q 207Q 207
Table 7-15
-Refer to Table 7-15. You want to hire a professional photographer to take pictures of your family. The table shows the costs of the four potential sellers in the local photography market. You hire Kevin for a price of $500. What is his producer surplus?
Free
Multiple Choice
Q 208Q 208
Table 7-15
-Refer to Table 7-15. You and your best friend want to hire a professional photographer to take pictures of your two families. The table shows the costs of the four potential sellers in the local photography market. You and your friend agree to offer $500 for each session. Who accepts the offer, and what is the total producer surplus in the market?
A) LeBron and Kobe; $500
B) Kevin and Steve; $500
C) LeBron and Kobe; $300
D) Kevin and Steve; $150
Free
Multiple Choice
Q 209Q 209
Table 7-15
-Refer to Table 7-15. You want to hire a professional photographer to take pictures of your family. The table shows the costs of the four potential sellers in the local photography market. Which of the following graphs represents the market supply curve?
A)
B)
C)
D)
Free
Multiple Choice
Q 210Q 210
Figure 7-9
-Refer to Figure 7-9. If the price of the good is $9.50, then producer surplus is
A) $3.00.
B) $6.50.
C) $10.50.
D) $8.50.
Free
Multiple Choice
Q 211Q 211
Figure 7-9
-Refer to Figure 7-9. If the price of the good is $14, then producer surplus is
A) $19.50.
B) $22.50.
C) $20.50.
D) $25.00.
Free
Multiple Choice
Q 212Q 212
Figure 7-9
-Refer to Figure 7-9. If producer surplus is $19, then the price of the good is
A) $11.50.
B) $14.50.
C) $13.50.
D) $9.75.
Free
Multiple Choice
Q 213Q 213
Figure 7-10
-Refer to Figure 7-10. Which area represents producer surplus when the price is P1?
A) BCG
B) ACH
C) ABGD
D) DGH
Free
Multiple Choice
Q 214Q 214
Figure 7-10
-Refer to Figure 7-10. Which area represents producer surplus when the price is P2?
A) BCG
B) ACH
C) ABGD
D) AHGB
Free
Multiple Choice
Q 215Q 215
Figure 7-10
-Refer to Figure 7-10. Which area represents the increase in producer surplus when the price rises from P1 to P2?
A) BCG
B) ACH
C) ABGD
D) AHGB
Free
Multiple Choice
Q 216Q 216
Figure 7-10
-Refer to Figure 7-10. When the price rises from P1 to P2, which area represents the increase in producer surplus to existing producers?
A) BCG
B) ACH
C) DGH
D) ABGD
Free
Multiple Choice
Q 217Q 217
Figure 7-10
-Refer to Figure 7-10. Which area represents the increase in producer surplus when the price rises from P1 to P2 due to new producers entering the market?
A) BCG
B) ACH
C) DGH
D) AHGB
Free
Multiple Choice
Q 218Q 218
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?
A) $625
B) $1,250
C) $2,500
D) $5,000
Free
Multiple Choice
Q 219Q 219
Figure 7-11
-Refer to Figure 7-11. If the supply curve is S', the demand curve is D, and the equilibrium price is $150, what is the producer surplus?
A) $625
B) $1,250
C) $2,500
D) $5,000
Free
Multiple Choice
Q 220Q 220
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?
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.
Free
Multiple Choice
Q 221Q 221
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?
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.
Free
Multiple Choice
Q 222Q 222
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 increase in producer surplus to existing producers?
A) $625
B) $2,500
C) $3,125
D) $5,625
Free
Multiple Choice
Q 223Q 223
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 increase in producer surplus due to new producers
A) $625
B) $2,500
C) $3,125
D) $5,625
Free
Multiple Choice
Q 224Q 224
Table 7-16
The following table represents the costs of five possible sellers.
Seller Cost ($)
-Refer to Table 7-16. If each producer has one unit available for sale, and if the market equilibrium price is $80 per unit, how much is the total producer surplus in this market?
A) $90
B) $110
C) $130
D) $140
Free
Multiple Choice
Q 225Q 225
Table 7-16
The following table represents the costs of five possible sellers.
Seller Cost ($)
-Refer to Table 7-16. If each producer has one unit available for sale, and if the market equilibrium price is $70, how much is the combined total cost of all participating sellers in the market?
A) $100
B) $150
C) $250
D) $350
Free
Multiple Choice
Q 226Q 226
Table 7-16
The following table represents the costs of five possible sellers.
Seller Cost ($)
-Refer to Table 7-16. Suppose each of the five sellers can supply at most one unit of the good. At which of the following prices would the market quantity supplied be exactly three units?
A) $20
B) $50
C) $90
D) $120
Free
Multiple Choice
Q 227Q 227
Figure 7-12
-Refer to Figure 7-12. If the equilibrium price is $200, what is the producer surplus?
A) $7,500
B) $3,750
C) $10,000
D) $15,000
Free
Multiple Choice
Q 228Q 228
Figure 7-12
-Refer to Figure 7-12. If the equilibrium price is $350, what is the producer surplus?
A) $60,000
B) $15,000
C) $30,000
D) $70,000
Free
Multiple Choice
Q 229Q 229
Figure 7-12
-Refer to Figure 7-12. If the equilibrium price rises from $200 to $350, what is the additional producer surplus to initial producers?
A) $15,000
B) $3,750
C) $7,500
D) $30,000
Free
Multiple Choice
Q 230Q 230
Figure 7-12
-Refer to Figure 7-12. If the equilibrium price rises from $200 to $350, what is the producer surplus to new producers
A) $15,000
B) $3,750
C) $7,500
D)$30,000
Free
Multiple Choice
Q 231Q 231
Figure 7-13
-Refer to Figure 7-13. If the equilibrium price is $60, what is the producer surplus?
A) $600
B) $1,200
C) $2,400
D) $4,800
Free
Multiple Choice
Q 232Q 232
Figure 7-13
-Refer to Figure 7-13. If the equilibrium price rises from $60 to $120, what is the additional producer surplus to initial producers in the market?
A) $1,200
B) $2,400
C) $3,600
D) $4,800
Free
Multiple Choice
Q 233Q 233
Figure 7-13
-Refer to Figure 7-13. If the equilibrium price rises from $60 to $120, what is the producer surplus to new producer s in the market?
A) $1,200
B) $2,400
C) $3,600
D) $4,800
Free
Multiple Choice
Q 234Q 234
Figure 7-14
-Refer to Figure 7-14. At the equilibrium price, producer surplus is
A) $800.
B) $400.
C) $450.
D) $900.
Free
Multiple Choice
Q 235Q 235
Figure 7-14
-Refer to Figure 7-14. If the government imposes a price ceiling of $50 in this market, then the new producer surplus will be
A) $200.
B) $100.
C) $125.
D) $250.
Free
Multiple Choice
Q 236Q 236
Figure 7-14
-Refer to Figure 7-14. If the government imposes a price ceiling of $50 in this market, then producer surplus will
A) $325.
B) $100.
C) $300.
D) $200.
Free
Multiple Choice
Q 237Q 237
Figure 7-14
-Refer to Figure 7-14. If the market price increases to $130 due to an increase in demand, then producer surplus is
A) $1,800.
B) $900.
C) $975.
D) $1,950.
Free
Multiple Choice
Q 238Q 238
Figure 7-15
-Refer to Figure 7-15. When the price is P2, producer surplus is
A) A.
B) A+C.
C) A+B+C.
D) D+G.
Free
Multiple Choice
Q 239Q 239
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
A) lower than P1.
B) P1.
C) between P1 and P2.
D) higher than P2.
Free
Multiple Choice
Q 240Q 240
Figure 7-15
-Refer to Figure 7-15. When the price is P1, producer surplus is
A) A.
B) C.
C) A+c.
D) C+D.
Free
Multiple Choice
Q 241Q 241
Figure 7-15
-Refer to Figure 7-15. When the price falls from P2 to P1, producer surplus
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.
Free
Multiple Choice
Q 242Q 242
Figure 7-15
-Refer to Figure 7-15. When the price rises from P1 to P2, what area represents the increase in producer surplus?
A) A
B) A+B
C) A+B+C
D) G
Free
Multiple Choice
Q 243Q 243
Figure 7-15
-Refer to Figure 7-15. When the price rises from P1 to P2, which area represents the increase in producer surplus to existing producers?
A) A
B) A+B
C) A+B+C
D) G
Free
Multiple Choice
Q 244Q 244
Figure 7-15
-Refer to Figure 7-15. When the price rises from P1 to P2, which area represents the increase in producer surplus due to new producers entering the market?
A) A
B) B
C) A+B
D) G
Free
Multiple Choice
Q 245Q 245
Figure 7-15
-Refer to Figure 7-15. Area A represents
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.
Free
Multiple Choice
Q 246Q 246
Figure 7-15
-Refer to Figure 7-15. Area B represents
A) the combined profits of all producers when the price is P2.
B) the increase in producer surplus to all producers as the result of an increase in the price from P1 to P2.
C) producer surplus to new producers entering the market as the result of an increase in the price from P1 to P2.
D) that portion of the increase in producer surplus that is offset by a loss in consumer surplus when the price increases from P1 to P2.
Free
Multiple Choice
Q 247Q 247
Figure 7-15
-Refer to Figure 7-15. When the price falls from P2 to P1, which of the following would not be true?
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.
Free
Multiple Choice
Q 248Q 248
Figure 7-16
-Refer to Figure 7-16. If the price of the good is $300, then producer surplus amounts to
A) $100.
B) $200.
C) $300.
D) $400.
Free
Multiple Choice
Q 249Q 249
Figure 7-16
-Refer to Figure 7-16. If the price of the good is $500, then producer surplus amounts to
A) $450.
B) $575.
C) $700.
D) $800.
Free
Multiple Choice
Q 250Q 250
Figure 7-16
-Refer to Figure 7-16. If the price of the good is $600, then producer surplus amounts to
A) $650.
B) $800.
C) $900.
D) $1,000.
Free
Multiple Choice
Q 251Q 251
Figure 7-16
-Refer to Figure 7-16. If the price of the good is $600, then
A) consumer surplus is $800.
B) consumer surplus is $900.
C) producer surplus is $900.
D) producer surplus is $1,000.
Free
Multiple Choice
Q 252Q 252
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
A) $200.
B) $300.
C) $400.
D) $450.
Free
Multiple Choice
Q 253Q 253
Figure 7-16
-Refer to Figure 7-16. Suppose the price of the good is $450. Then, on the first unit of the good that is sold, producer surplus is
A) $250, and on the second unit of the good that is sold, producer surplus is $100.
B) $250, and on the second unit of the good that is sold, producer surplus is $150.
C) $350, and on the second unit of the good that is sold, producer surplus is $100.
D) $350, and on the second unit of the good that is sold, producer surplus is $150.
Free
Multiple Choice
Q 254Q 254
Figure 7-16
-Refer to Figure 7-16. Producer surplus amounts to $300 if the price of the good is
A) $300.
B) $350.
C) $400.
D) $450.
Free
Multiple Choice
Q 255Q 255
Figure 7-16
-Refer to Figure 7-16. Sellers will be unwilling to sell more than
A) 1 unit of the good if its price is below $200.
B) 2 units of the good if its price is below $450.
C) 3 units of the good if its price is below $700.
D) All of the above are correct.
Free
Multiple Choice
Q 256Q 256
Figure 7-17
-Refer to Figure 7-17. If the supply curve is S and the demand curve is D, what is total producer surplus at the equilibrium price?
A) $202.50
B) $405
C) $810
D) $1,215
Free
Multiple Choice
Q 257Q 257
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?
A) Producer surplus increases by $225.
B) Producer surplus increases by $675.
C) Producer surplus decreases by $225.
D) Producer surplus decreases by $675.
Free
Multiple Choice
Q 258Q 258
Figure 7-17
-Refer to Figure 7-17. Suppose the market starts out in equilibrium with demand curve D and supply curve S. Next, suppose demand shifts left so as to decrease the quantity demanded by 20 units at every price. What is the change in producer surplus as a result of this demand shift?
A) $80
B) $160
C) $240
D) $320
Free
Multiple Choice
Q 259Q 259
Producer surplus equals
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.
Free
Multiple Choice
Q 260Q 260
Producer surplus is the
A) area under the supply curve to the left of the amount sold.
B) amount a seller is paid minus the cost of production.
C) area between the supply and demand curves, above the equilibrium price.
D) cost to sellers of participating in a market.
Free
Multiple Choice
Q 261Q 261
Producer surplus is the area
A) under the supply curve.
B) between the supply and demand curves.
C) below the price and above the supply curve.
D) under the demand curve and above the price.
Free
Multiple Choice
Q 262Q 262
Producer surplus is
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.
Free
Multiple Choice
Q 263Q 263
Producer surplus directly measures
A) the well-being of society as a whole.
B) the well-being of buyers and sellers.
C) the well-being of sellers.
D) sellers' willingness to sell.
Free
Multiple Choice
Q 264Q 264
Producer surplus directly measures
A) the well-being of sellers.
B) production costs.
C) excess demand.
D) unsold inventories.
Free
Multiple Choice
Q 265Q 265
The marginal seller is the seller who
A) cannot compete with the other sellers in the market.
B) would leave the market first if the price were any lower.
C) can produce at the lowest cost.
D) has the largest producer surplus.
Free
Multiple Choice
Q 266Q 266
The marginal seller is the seller
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.
Free
Multiple Choice
Q 267Q 267
Another way to think of the marginal seller is the seller who
A) will accept the lowest price of any seller in the market.
B) requires the highest price of any potential seller in the market.
C) would leave the market first if the price were any lower.
D) would leave the market last if the price falls.
Free
Multiple Choice
Q 268Q 268
Suppose the demand for peanuts increases. What will happen to producer surplus in the market for peanuts?
A) It increases.
B) It decreases.
C) It remains unchanged.
D) It may increase, decrease, or remain unchanged.
Free
Multiple Choice
Q 269Q 269
Suppose the demand for peaches decreases. What will happen to producer surplus in the market for peaches?
A) It increases.
B) It decreases.
C) It remains unchanged.
D) It may increase, decrease, or remain unchanged.
Free
Multiple Choice
Q 270Q 270
Which of the following will cause an increase in producer surplus?
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 inferior
Free
Multiple Choice
Q 271Q 271
If the demand for leather decreases, producer surplus in the leather market
A) increases.
B) decreases.
C) remains the same.
D) may increase, decrease, or remain the same.
Free
Multiple Choice
Q 272Q 272
If the demand for light bulbs increases, producer surplus in the market for light bulbs
A) increases.
B) decreases.
C) remains the same.
D) may increase, decrease, or remain the same.
Free
Multiple Choice
Q 273Q 273
The Surgeon General announces that eating chocolate increases tooth decay. As a result, the equilibrium price of chocolate
A) increases, and producer surplus increases.
B) increases, and producer surplus decreases.
C) decreases, and producer surplus increases.
D) decreases, and producer surplus decreases.
Free
Multiple Choice
Q 274Q 274
Suppose consumer income increases. If grass seed is a normal good, the equilibrium price of grass seed will
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.
Free
Multiple Choice
Q 275Q 275
Which of the following statements is not correct?
A) A seller would be eager to sell her product at a price higher than her cost.
B) A seller would refuse to sell her product at a price lower than her cost.
C) A seller would be indifferent about selling her product at a price equal to her cost.
D) Since sellers cannot set the price for their product, they must be willing to sell their product at any price.
Free
Multiple Choice
Q 276Q 276
Which of the following events would increase producer surplus?
A) Sellers' costs stay the same and the price of the good increases.
B) Sellers' costs increase and the price of the good stays the same.
C) Sellers' costs increase and the price of the good decreases.
D) All of the above are correct.
Free
Multiple Choice
Q 277Q 277
Which of the following will cause a decrease in producer surplus?
A) the imposition of a binding price ceiling in the market
B) an increase in the number of buyers of the good
C) income increases and buyers consider the good to be normal
D) the price of a complement decreases
Free
Multiple Choice
Q 278Q 278
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?
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.
Free
Multiple Choice
Q 279Q 279
The welfare of sellers is measured by
A) consumer surplus.
B) producer surplus.
C) total surplus.
D) price.
Free
Multiple Choice
Q 280Q 280
The Surgeon General announces that eating apples promotes healthy teeth. As a result, the equilibrium price of apples
A) increases, and producer surplus increases.
B) increases, and producer surplus decreases.
C) decreases, and producer surplus increases.
D) decreases, and producer surplus decreases.
Free
Multiple Choice
Q 281Q 281
Which of the following will cause a decrease in producer surplus?
A) the imposition of a nonbinding price ceiling in the market
B) buyers expect the price of a good to be higher next month
C) the price of a substitute increases
D) income increases and buyers consider the good to be inferior
Free
Multiple Choice
Q 282Q 282
Which of the following will cause no change in producer surplus?
A) the imposition of a nonbinding price ceiling in the market
B) buyers expect the price of a good to be higher next month
C) the price of a substitute increases
D) income increases and buyers consider the good to be inferior
Free
Multiple Choice
Q 283Q 283
Suppose that the market price for pizzas increases. The increase in producer surplus comes from the benefit of the higher prices to
A) only existing sellers who now receive higher prices on the pizzas they were already selling.
B) only new sellers who enter the market because of the higher prices.
C) both existing sellers who now receive higher prices on the pizzas they were already selling and new sellers who enter the market because of the higher prices.
D) Producer surplus does not increase; it decreases.
Free
Multiple Choice
Q 284Q 284
Which tools allow economists to determine if the allocation of resources determined by free markets is desirable?
A) profits and costs to firms
B) consumer and producer surplus
C) the equilibrium price and quantity
D) incomes of and prices paid by buyers
Free
Multiple Choice
Q 285Q 285
Economists typically measure efficiency using
A) the price paid by buyers.
B) the quantity supplied by sellers.
C) total surplus.
D) profits to firms.
Free
Multiple Choice
Q 286Q 286
Consumer surplus equals the
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.
Free
Multiple Choice
Q 287Q 287
Producer surplus equals the
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.
Free
Multiple Choice
Q 288Q 288
Total surplus
A) can be used to measure a market's efficiency.
B) is the sum of consumer and producer surplus.
C) is the value to buyers minus the cost to sellers.
D) All of the above are correct.
Free
Multiple Choice
Q 289Q 289
Total surplus is
A) the total cost to sellers of providing the good minus the total value of the good to buyers.
B) the total value of the good to buyers minus the cost to sellers of providing the good.
C) the difference between consumer surplus and sellers' cost.
D) always smaller than producer surplus.
Free
Multiple Choice
Q 290Q 290
Total surplus is
A) equal to consumer surplus minus producer surplus.
B) equal to the total value to buyers minus the total cost to sellers.
C) equal to consumers' willingness to pay plus producers' cost.
D) greater than the sum of consumer surplus plus producer surplus.
Free
Multiple Choice
Q 291Q 291
Total surplus is equal to
A) value to buyers - profit to sellers.
B) value to buyers - cost to sellers.
C) consumer surplus x producer surplus.
D) (consumer surplus + producer surplus) x equilibrium quantity.
Free
Multiple Choice
Q 292Q 292
Total surplus in a market is equal to
A) value to buyers - amount paid by buyers.
B) amount received by sellers - costs of sellers.
C) value to buyers - costs of sellers.
D) amount received by sellers - amount paid by buyers.
Free
Multiple Choice
Q 293Q 293
Total surplus in a market is equal to
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.
Free
Multiple Choice
Q 294Q 294
Total surplus is represented by the area
A) under the demand curve and above the price.
B) above the supply curve and up to the price.
C) under the supply curve and up to the price.
D) between the demand and supply curves up to the point of equilibrium.
Free
Multiple Choice
Q 295Q 295
Which of the following equations is not valid?
A) Consumer surplus = Value to buyers - Amount paid by buyers
B) Producer surplus = Amount received by sellers - Cost to sellers
C) Total surplus = Value to buyers - Amount paid by buyers + Amount received by sellers - Costs of sellers
D) Total surplus = Value to sellers - Cost to sellers
Free
Multiple Choice
Q 296Q 296
Which of the following equations is valid?
A) Consumer surplus = Total surplus - Cost to sellers
B) Producer surplus = Total surplus - Consumer surplus
C) Total surplus = Value to buyers - Amount paid by buyers
D) Total surplus = Amount received by sellers - Cost to sellers
Free
Multiple Choice
Q 297Q 297
Total surplus is represented by the area below the
A) demand curve and above the price.
B) price and up to the point of equilibrium.
C) demand curve and above the supply curve, up to the equilibrium quantity.
D) demand curve and above the horizontal axis, up to the equilibrium quantity.
Free
Multiple Choice
Q 298Q 298
Which of the following is correct?
A) Consumer surplus refers to a situation in which there are more buyers than sellers in a market.
B) Producer surplus refers to a situation in which there are more sellers than buyers in a market.
C) Total surplus is measured as the area below the demand curve and above the supply curve, up to the equilibrium quantity.
D) All of the above are correct.
Free
Multiple Choice
Q 299Q 299
We can say that the allocation of resources is efficient if
A) producer surplus is maximized.
B) consumer surplus is maximized.
C) total surplus is maximized.
D) sellers' costs are minimized.
Free
Multiple Choice
Q 300Q 300
Efficiency in a market is achieved when
A) a social planner intervenes and sets the quantity of output after evaluating buyers' willingness to pay and sellers' costs.
B) the sum of producer surplus and consumer surplus is maximized.
C) all firms are producing the good at the same low cost per unit.
D) no buyer is willing to pay more than the equilibrium price for any unit of the good.
Free
Multiple Choice
Q 301Q 301
At the equilibrium price of a good, the good will be purchased by those buyers who
A) value the good more than price.
B) value the good less than price.
C) have the money to buy the good.
D) consider the good a necessity.
Free
Multiple Choice
Q 302Q 302
At the equilibrium price of a good, the good will be sold by those sellers
A) whose cost is more than price.
B) whose cost is less than price.
C) that can produce the good.
D) enter the market first.
Free
Multiple Choice
Q 303Q 303
Which of the following statements is not correct about a market in equilibrium?
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.
Free
Multiple Choice
Q 304Q 304
Efficiency is attained when
A) total surplus is maximized.
B) producer surplus is maximized.
C) all resources are being used.
D) consumer surplus is maximized and producer surplus is minimized.
Free
Multiple Choice
Q 305Q 305
The distinction between efficiency and equality can be described as follows:
A) Efficiency refers to maximizing the number of trades among buyers and sellers; equality refers to maximizing the gains from trade among buyers and sellers.
B) Efficiency refers to minimizing the price paid by buyers; equality refers to maximizing the gains from trade among buyers and sellers.
C) Efficiency refers to maximizing the size of the pie; equality refers to producing a pie of a given size at the least possible cost.
D) Efficiency refers to maximizing the size of the pie; equality refers to distributing the pie fairly among members of society.
Free
Multiple Choice
Q 306Q 306
If an allocation of resources is efficient, then
A) consumer surplus is maximized.
B) producer surplus is maximized.
C) all potential gains from trade among buyers are sellers are being realized.
D) the allocation achieves equality as well.
Free
Multiple Choice
Q 307Q 307
Moving production from a high-cost producer to a low-cost producer will
A) lower total surplus.
B) raise total surplus.
C) lower producer surplus.
D) raise producer surplus but lower consumer surplus.
Free
Multiple Choice
Q 308Q 308
Which of the following is correct?
A) Efficiency deals with the size of the economic pie, and equality deals with how fairly the pie is sliced.
B) Equality can be judged on positive grounds whereas efficiency requires normative judgments.
C) Efficiency is more difficult to evaluate than equality.
D) Equality and efficiency are both maximized in a society when total surplus is maximized.
Free
Multiple Choice
Q 309Q 309
Table 7-17
-Refer to Table 7-17. The equilibrium price is
A) $10.00.
B) $8.00.
C) $6.00.
D) $4.00.
Free
Multiple Choice
Q 310Q 310
Table 7-17
-Refer to Table 7-17. At a price of $2.00, total surplus is
A) larger than it would be at the equilibrium price.
B) smaller 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.
Free
Multiple Choice
Q 311Q 311
Table 7-17
-Refer to Table 7-17. Both the demand curve and the supply curve are straight lines. At equilibrium, consumer surplus is
A) $24.
B) $36.
C) $42.
D) $48.
Free
Multiple Choice
Q 312Q 312
Table 7-17
-Refer to Table 7-17. Both the demand curve and the supply curve are straight lines. At equilibrium, producer surplus is
A) $24.
B) $32.
C) $48.
D) $64.
Free
Multiple Choice
Q 313Q 313
Table 7-17
-Refer to Table 7-17. Both the demand curve and the supply curve are straight lines. At equilibrium, total surplus is
A) $44.
B) $56.
C) $72.
D) $96.
Free
Multiple Choice
Q 314Q 314
Table 7-17
-Refer to Table 7-17. Both the demand curve and the supply curve are straight lines. If the price is $4 but only 6 units are bought and sold, consumer surplus will be
A) $21.
B) $28.
C) $36.
D) $42.
Free
Multiple Choice
Q 315Q 315
Table 7-17
-Refer to Table 7-17. Both the demand curve and the supply curve are straight lines. If the price is $4 but only 6 units are bought and sold, producer surplus will be
A) $16.
B) $18.
C) $24.
D) $26.
Free
Multiple Choice
Q 316Q 316
Table 7-17
-Refer to Table 7-17. Both the demand curve and the supply curve are straight lines. If the price is $4 but only 6 units are bought and sold, total surplus will be
A) $42.
B) $48.
C) $54.
D) $60.
Free
Multiple Choice
Q 317Q 317
Table 7-17
-Refer to Table 7-17. Both the demand curve and the supply curve are straight lines. If 6 units are bought and sold, then total surplus is
A) $18 lower than it would be if the equilibrium number of units were bought and sold.
B) $22 lower than it would be if the equilibrium number of units were bought and sold.
C) $26 lower than it would be if the equilibrium number of units were bought and sold.
D) $6 higher than it would be if the equilibrium number of units were bought and sold.
Free
Multiple Choice
Q 318Q 318
Figure 7-18
-Refer to Figure 7-18. Suppose the willingness to pay of the marginal buyer of the 3rd unit is $125. Then total surplus is maximized if
A) 1 unit of the good is produced and sold.
B) 2 units of the good are produced and sold.
C) 3 units of the good are produced and sold.
D) 4 units of the good are produced and sold.
Free
Multiple Choice
Q 319Q 319
Figure 7-18
-Refer to Figure 7-18. If total surplus is $240 and consumer surplus is
A) $100, then the price of the good is $130.
B) $130, then the price of the good is $120.
C) $160, then the price of the good is $100.
D) $120, then the price of the good is $90.
Free
Multiple Choice
Q 320Q 320
Figure 7-18
-Refer to Figure 7-18. Total surplus amounts to $500 if consumer surplus amounts to
A) $290 and if the price of the good is $150.
B) $300 and if the price of the good is $130.
C) $275 and if the price of the good is $160.
D) $400 and if the price of the good is $100.
Free
Multiple Choice
Q 321Q 321
Figure 7-19
-Refer to Figure 7-19. At the equilibrium price, consumer surplus is
A) $100.
B) $200.
C) $50.
D) $450.
Free
Multiple Choice
Q 322Q 322
Figure 7-19
-Refer to Figure 7-19. At the equilibrium price, producer surplus is
A) $300.
B) $150.
C) $450.
D) $125.
Free
Multiple Choice
Q 323Q 323
Figure 7-19
-Refer to Figure 7-19. At the equilibrium price, total surplus is
A) $125.
B) $450.
C) $250.
D) $500.
Free
Multiple Choice
Q 324Q 324
Figure 7-19
-Refer to Figure 7-19. If the government imposes a price ceiling of $55 in this market, then total surplus will be
A) $187.50.
B) $125.00.
C) $250.00.
D) $266.67.
Free
Multiple Choice
Q 325Q 325
Figure 7-19
-Refer to Figure 7-19. If the government imposes a price floor of $55 in this market, then total surplus will be
A) $100.00 higher than it would be without the price floor.
B) $50.00 lower than it would be without the price floor.
C) $125.00 lower than it would be without the price floor.
D) $62.50 lower than it would be without the price floor.
Free
Multiple Choice
Q 326Q 326
Figure 7-19
-Refer to Figure 7-19. If the government imposes a price floor of $55 in this market, then total surplus will be
A) $137.50.
B) $125.00.
C) $187.50.
D) $275.00.
Free
Multiple Choice
Q 327Q 327
Figure 7-20
-Refer to Figure 7-20. Total surplus can be measured as the area
A) JNK.
B) JNML.
C) JRL.
D) JNL.
Free
Multiple Choice
Q 328Q 328
Figure 7-20
-Refer to Figure 7-20. For quantities less than M, the value to the marginal buyer is
A) greater than the cost to the marginal seller, so increasing the quantity increases total surplus.
B) less than the cost to the marginal seller, so increasing the quantity increases total surplus.
C) greater than the cost to the marginal seller, so decreasing the quantity increases total surplus.
D) less than the cost to the marginal seller, so decreasing the quantity increases total surplus.
Free
Multiple Choice
Q 329Q 329
Figure 7-20
-Refer to Figure 7-20. For quantities greater than M, the value to the marginal buyer is
A) greater than the cost to the marginal seller, so increasing the quantity increases total surplus.
B) less than the cost to the marginal seller, so increasing the quantity increases total surplus.
C) greater than the cost to the marginal seller, so decreasing the quantity increases total surplus.
D) less than the cost to the marginal seller, so decreasing the quantity increases total surplus.
Free
Multiple Choice
Q 330Q 330
Figure 7-21
-Refer to Figure 7-21. Which area represents consumer surplus when the price is P1?
A) A
B) B
C) C
D) D
Free
Multiple Choice
Q 331Q 331
Figure 7-21
-Refer to Figure 7-21. When the price is P1, area B represents
A) total surplus.
B) producer surplus.
C) consumer surplus.
D) profits.
Free
Multiple Choice
Q 332Q 332
Figure 7-21
-Refer to Figure 7-21. Which area represents producer surplus when the price is P1?
A) A
B) B
C) C
D) D
Free
Multiple Choice
Q 333Q 333
Figure 7-21
-Refer to Figure 7-21. When the price is P1, area C represents
A) total benefit.
B) producer surplus.
C) consumer surplus.
D) None of the above is correct.
Free
Multiple Choice
Q 334Q 334
Figure 7-21
-Refer to Figure 7-21. When the price is P1, area A represents
A) total benefit.
B) producer surplus.
C) consumer surplus.
D) None of the above is correct.
Free
Multiple Choice
Q 335Q 335
Figure 7-21
-Refer to Figure 7-21. When the price is P1, area B+C represents
A) total surplus.
B) producer surplus.
C) consumer surplus.
D) None of the above is correct.
Free
Multiple Choice
Q 336Q 336
Figure 7-21
-Refer to Figure 7-21. Which area represents total surplus in the market when the price is P1?
A) A+B
B) B+C
C) C+D
D) A+B+C+D
Free
Multiple Choice
Q 337Q 337
Figure 7-22
-Refer to Figure 7-22. At the equilibrium price, consumer surplus is
A) $1,000.
B) $2,000.
C) $3,500.
D) $500.
Free
Multiple Choice
Q 338Q 338
Figure 7-22
-Refer to Figure 7-22. If the price decreases from $80 to $70 due to a shift in the supply curve, consumer surplus increases by
A) $250.
B) $750.
C) $1000.
D) $500.
Free
Multiple Choice
Q 339Q 339
Figure 7-22
-Refer to Figure 7-22. At the equilibrium price, producer surplus is
A) $5,000.
B) $2,500.
C) $3,500.
D) $1,750.
Free
Multiple Choice
Q 340Q 340
Figure 7-22
-Refer to Figure 7-22. At the equilibrium price, total surplus is
A) $2,500.
B) $1,000.
C) $3,500.
D) $7,000.
Free
Multiple Choice
Q 341Q 341
Figure 7-22
-Refer to Figure 7-22. Assume demand increases, which causes the equilibrium price to increase from $50 to $70. The increase in producer surplus due to new producers entering the market would be
A) $400.
B) $800.
C) $1,200.
D) $900.
Free
Multiple Choice
Q 342Q 342
Figure 7-22
-Refer to Figure 7-22. Assume demand increases, which causes the equilibrium price to increase from $50 to $70. The increase in producer surplus to producers already in the market would be
A) $1,600.
B) $600.
C) $800.
D) $1,200.
Free
Multiple Choice
Q 343Q 343
Figure 7-22
-Refer to Figure 7-22. Assume demand increases, which causes the equilibrium price to increase from $50 to $70. The increase in producer surplus would be
A) $2,500.
B) $900.
C) $800.
D) $1,600.
Free
Multiple Choice
Q 344Q 344
Figure 7-22
-Refer to Figure 7-22. The efficient price is
A) $80, and the efficient quantity is 50.
B) $70, and the efficient quantity is 60.
C) $70, and the efficient quantity is 100.
D) $50, and the efficient quantity is 60.
Free
Multiple Choice
Q 345Q 345
Figure 7-22
-Refer to Figure 7-22. If 110 units of the good are bought and sold, then
A) the marginal cost to sellers is equal to the marginal value to buyers.
B) the marginal value to buyers is greater than the marginal cost to sellers.
C) the marginal cost to buyers is greater than marginal value to sellers.
D) producer surplus is greater than consumer surplus.
Free
Multiple Choice
Q 346Q 346
Figure 7-22
-Refer to Figure 7-22. If 40 units of the good are bought and sold, then
A) the marginal cost to sellers is equal to the marginal value to buyers.
B) the marginal value to buyers is greater than the marginal cost to sellers.
C) the marginal cost to sellers is greater than the marginal value to buyers.
D) producer surplus would be greater than consumer surplus.
Free
Multiple Choice
Free
Multiple Choice
Q 348Q 348
Figure 7-23
-Refer to Figure 7-23. At equilibrium, consumer surplus is represented by the area
A) A.
B) A+B+C.
C) D+H+F.
D) A+B+C+D+H+F.
Free
Multiple Choice
Q 349Q 349
Figure 7-23
-Refer to Figure 7-23. If the price were P3, consumer surplus would be represented by the area
A) A.
B) A+B+C.
C) D+H+F.
D) A+B+C+D+H+F.
Free
Multiple Choice
Q 350Q 350
Figure 7-23
-Refer to Figure 7-23. At equilibrium, producer surplus is represented by the area
A) F.
B) F+G.
C) D+H+F.
D) D+H+F+G+I.
Free
Multiple Choice
Q 351Q 351
Figure 7-23
-Refer to Figure 7-23. If the price were P1, producer surplus would be represented by the area
A) F.
B) F+G.
C) D+H+F.
D) D+H+F+G+I.
Free
Multiple Choice
Q 352Q 352
Figure 7-23
-Refer to Figure 7-23. At equilibrium, total surplus is represented by the area
A) A+B+C.
B) A+B+D+F.
C) A+B+C+D+H+F.
D) A+B+C+D+H+F+G+I.
Free
Multiple Choice
Q 353Q 353
Figure 7-23
-Refer to Figure 7-23. The efficient price-quantity combination is
A) P1 and Q1.
B) P2 and Q2.
C) P3 and Q1.
D) P4 and 0.
Free
Multiple Choice
Q 354Q 354
Figure 7-24
-Refer to Figure 7-24. At equilibrium, consumer surplus is measured by the area
A) AHG.
B) AFB.
C) ABD.
D) BDF.
Free
Multiple Choice
Q 355Q 355
Figure 7-24
-Refer to Figure 7-24. At equilibrium, consumer surplus is
A) $18.
B) $36.
C) $54.
D) $72.
Free
Multiple Choice
Q 356Q 356
Figure 7-24
-Refer to Figure 7-24. At equilibrium, producer surplus is measured by the area
A) ABD.
B) ABF.
C) CDI.
D) BDF.
Free
Multiple Choice
Q 357Q 357
Figure 7-24
-Refer to Figure 7-24. At equilibrium, producer surplus is
A) $36.
B) $72.
C) $54.
D) $18.
Free
Multiple Choice
Q 358Q 358
Figure 7-24
-Refer to Figure 7-24. At equilibrium, total surplus is measured by the area
A) ABD.
B) ABF.
C) FBD.
D) HGCI.
Free
Multiple Choice
Q 359Q 359
Figure 7-24
-Refer to Figure 7-24. At equilibrium, total surplus is
A) $36.
B) $54.
C) $18.
D) $108.
Free
Multiple Choice
Q 360Q 360
Figure 7-24
-Refer to Figure 7-24. The equilibrium allocation of resources is
A) efficient because total surplus is maximized at the equilibrium.
B) efficient because consumer surplus is maximized at the equilibrium.
C) inefficient because consumer surplus is larger than producer surplus at the equilibrium.
D) inefficient because producer surplus is not maximized.
Free
Multiple Choice
Q 361Q 361
Figure 7-24
-Refer to Figure 7-24. If 4 units of the good are produced and sold, then
A) producer surplus is greater than consumer surplus.
B) consumer surplus is $16.
C) total surplus is minimized.
D) total surplus is not maximized.
Free
Multiple Choice
Q 362Q 362
Figure 7-24
-Refer to Figure 7-24. If 10 units of the good are produced and sold, then
A) the marginal cost to sellers exceeds the marginal value to buyers.
B) producer surplus is maximized.
C) total surplus is minimized.
D) the marginal value to buyers exceeds the marginal cost to sellers.
Free
Multiple Choice
Q 363Q 363
Figure 7-24
-Refer to Figure 7-24. If 6 units of the good are produced and sold, then
A) consumer surplus is greater than producer surplus.
B) producer surplus is maximized.
C) the sum of consumer surplus and producer surplus is maximized.
D) consumer surplus equals producer surplus.
Free
Multiple Choice
Q 364Q 364
Figure 7-24
-Refer to Figure 7-24. If 6 units of the good are produced and sold, then
A) efficiency is achieved in this market.
B) the marginal value to buyers equals the marginal cost to sellers.
C) the sum of consumer surplus and producer surplus is maximized.
D) All of the above are correct.
Free
Multiple Choice
Q 365Q 365
Figure 7-24
-Refer to Figure 7-24. If the government imposes a price floor at $18, then consumer surplus is
A) ABF.
B) AGH.
C) HGCD.
D) HGBF.
Free
Multiple Choice
Q 366Q 366
Figure 7-24
-Refer to Figure 7-24. If the government imposes a price ceiling at $12, then producer surplus is
A) CDI.
B) BDF.
C) BCIF.
D) HGCD.
Free
Multiple Choice
Q 367Q 367
Figure 7-25
-Refer to Figure 7-25. At the equilibrium price, total surplus is
A) $288.
B) $576.
C) $1,152.
D) $2,304.
Free
Multiple Choice
Q 368Q 368
Figure 7-25
-Refer to Figure 7-25. Suppose the government imposes a price ceiling of $16 in this market. If the buyers with the highest willingness to pay purchase the good, then total surplus will be
A) $256.
B) $768.
C) $1,024.
D) $1,280.
Free
Multiple Choice
Q 369Q 369
Figure 7-25
-Refer to Figure 7-25. Suppose the government imposes a price floor of $28 in this market. If the sellers with the lowest cost are the ones who sell the good and the government does not purchase any excess units produced, then total surplus will be
A) $400.
B) $800.
C) $1,120.
D) $1,184.
Free
Multiple Choice
Q 370Q 370
Figure 7-26
-Refer to Figure 7-26. At the equilibrium price, consumer surplus is
A) $600.
B) $900.
C) $1,500.
D) $1,800.
Free
Multiple Choice
Q 371Q 371
Figure 7-26
-Refer to Figure 7-26. At the equilibrium price, producer surplus is
A) $600.
B) $900.
C) $1,200.
D) $1,800.
Free
Multiple Choice
Q 372Q 372
Figure 7-26
-Refer to Figure 7-26. At the equilibrium price, total surplus is
A) $600.
B) $1,200.
C) $1,500.
D) $1,800.
Free
Multiple Choice
Q 373Q 373
Figure 7-26
-Refer to Figure 7-26. If the government imposes a price floor of $90 in this market, then consumer surplus will be
A) $225.
B) $450.
C) $975.
D) $1,350
Free
Multiple Choice
Q 374Q 374
Figure 7-27
-Refer to Figure 7-27. Buyers who value this good more than the equilibrium price are represented by which line segment?
A) AC.
B) CK.
C) BC.
D) CH.
Free
Multiple Choice
Q 375Q 375
Figure 7-27
-Refer to Figure 7-27. Buyers who value this good less than the equilibrium price are represented by which line segment?
A) AC.
B) CK.
C) BC.
D) CH.
Free
Multiple Choice
Q 376Q 376
Figure 7-27
-Refer to Figure 7-27. Sellers whose costs are less than the equilibrium price are represented by which line segment?
A) AC.
B) CK.
C) BC.
D) CH.
Free
Multiple Choice
Q 377Q 377
Figure 7-27
-Refer to Figure 7-27. Sellers whose costs are greater than the equilibrium price are represented by segment
A) AC.
B) CK.
C) BC.
D) CH.
Free
Multiple Choice
Q 378Q 378
Figure 7-27
-Refer to Figure 7-27. If the government mandated a price increase from P1 to a higher price, then
A) total surplus would decrease.
B) consumer surplus would increase.
C) total surplus would increase, since producer surplus would increase.
D) total surplus would remain unchanged.
Free
Multiple Choice
Q 379Q 379
Figure 7-28
-Refer to Figure 7-28. At the quantity Q3,
A) the market is in equilibrium.
B) consumer surplus is maximized.
C) the sum of consumer surplus and producer surplus is maximized.
D) the marginal value to buyers is less than the marginal cost to sellers.
Free
Multiple Choice
Q 380Q 380
Figure 7-28
-Refer to Figure 7-28. At the quantity Q2, the marginal value to buyers
A) and the marginal cost to sellers are both P2.
B) is P2, and the marginal cost to sellers is P3.
C) and the marginal cost to sellers are both P3.
D) is P3, and the marginal cost to sellers is P2.
Free
Multiple Choice
Q 381Q 381
Figure 7-29
-Refer to Figure 7-29. Which of the following statements is correct?
A) The market is in equilibrium at Q1.
B) At Q2, the cost to sellers exceeds the value to buyers.
C) At Q4, the value to buyers is less than the cost to sellers.
D) At Q3, the market is producing too much output.
Free
Multiple Choice
Q 382Q 382
Inefficiency exists in an economy when a good is
A) not being consumed by buyers who value it most highly.
B) not distributed fairly among buyers.
C) not produced because buyers do not value it very highly.
D) being produced with less than all available resources.
Free
Multiple Choice
Q 383Q 383
Inefficiency exists in an economy when a good is
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.
Free
Multiple Choice
Q 384Q 384
The "invisible hand" refers to
A) the marketplace guiding the self-interests of market participants into promoting general economic well-being.
B) the fact that social planners sometimes have to intervene, even in perfectly competitive markets, to make those markets more efficient.
C) the equality that results from market forces allocating the goods produced in the market.
D) the automatic maximization of consumer surplus in free markets.
Free
Multiple Choice
Q 385Q 385
The "invisible hand" is
A) used to describe the welfare system in the United States.
B) a concept developed by Adam Smith to describe the virtues of free markets.
C) a concept used by J.M. Keynes to describe the role of government in guiding the allocation of resources in the economy.
D) a term used by some economists to characterize the role of government in an economy - inevitable but invisible.
Free
Multiple Choice
Q 386Q 386
Laissez-faire is a French expression which literally means
A) to make do.
B) to get involved.
C) whatever works.
D) allow them to do.
Free
Multiple Choice
Q 387Q 387
The French expression used by free-market advocates, which literally translates as "allow them to do," is
A) laissez-faire.
B) je ne sais pas.
C) si'l vous plait.
D) têteàtête.
Free
Multiple Choice
Q 388Q 388
If the government allowed a free market for transplant organs such as kidneys to exist, the
A) shortage of organs would be eliminated, and there would be no surplus of organs.
B) shortage of organs would be eliminated, but a surplus of organs would develop.
C) shortage of organs would persist.
D) overall well-being of society would remain unchanged.
Free
Multiple Choice
Q 389Q 389
If the government allowed a free market for transplant organs such as kidneys to exist, critics argue that such a market would
A) not reduce the shortage of organs.
B) benefit rich people but not poor people.
C) be inefficient because markets are not good at allocating scarce resources.
D) be inferior to a plan imposed by a benevolent dictator.
Free
Multiple Choice
Q 390Q 390
If the government allowed a free market in organs for transplant there would be
A) a decrease in the shortage of organs for transplant.
B) a decrease in producer surplus.
C) an decrease in consumer surplus
D) an increase in the waiting period for transplant organs.
Free
Multiple Choice
Q 391Q 391
At present, the maximum legal price for a human kidney is $0. The price of $0 maximizes
A) consumer surplus but not producer surplus.
B) producer surplus but not consumer surplus.
C) both consumer and producer surplus.
D) neither consumer nor producer surplus.
Free
Multiple Choice
Q 392Q 392
If the United States changed its laws to allow for the legal sale of a kidney, which of the following is likely to occur?
A) The price of kidneys would rise to balance supply and demand.
B) The gains from trade would make both buyers and sellers better off.
C) Thousands of lives would be saved.
D) All of the above are correct.
Free
Multiple Choice
Q 393Q 393
If the United States changed its laws to allow for the legal sale of a kidney, which of the following is least likely to occur?
A) The supply of kidneys would increase.
B) The shortage of kidneys would decrease.
C) Many lives would be saved.
D) The allocation of kidneys would be fair.
Free
Multiple Choice
Q 394Q 394
According to many economists, government restrictions on ticket scalping do all of the following except
A) inconvenience the public.
B) reduce the audience for cultural and sports events.
C) waste police officers' time.
D) keep the cost of tickets to all consumers low.
Free
Multiple Choice
Q 395Q 395
Economists tend to see ticket scalping as
A) a way for a few to profit without producing anything of value.
B) an inequitable interference in the orderly process of ticket distribution.
C) a way of increasing the efficiency of ticket distribution.
D) an unproductive activity which should be made illegal everywhere.
Free
Multiple Choice
Q 396Q 396
Many economists believe that restrictions against ticket scalping result in each of the following except
A) a smaller audience for cultural and sporting events.
B) shorter lines at cultural and sporting events.
C) less tax revenue for the state.
D) an increase in ticket prices.
Free
Multiple Choice
Q 397Q 397
The 2005 Boston Globe article discussing ticket scalping points out that the price people will pay for tickets will rise when
A) supply and demand are both limited.
B) supply is limited and demand is not limited.
C) supply is limited and demand is not limited.
D) supply and demand are both not limited.
Free
Multiple Choice
Q 398Q 398
Suppose that the equilibrium price in the market for widgets is $5. If a law increased the minimum legal price for widgets to $6, producer surplus
A) would necessarily increase even if the higher price resulted in a surplus of widgets.
B) would necessarily decrease because the higher price would create a surplus of widgets.
C) might increase or decrease.
D) would be unaffected.
Free
Multiple Choice
Q 399Q 399
Suppose that the equilibrium price in the market for tomatoes is $3 per pound. If a law reduced the maximum legal price for tomatoes to $2 per pound,
A) any possible increase in consumer surplus would be larger than the loss of producer surplus.
B) any possible increase in consumer surplus would be smaller than the loss of producer surplus.
C) the resulting increase in producer surplus would be larger than any possible loss of consumer surplus.
D) the resulting increase in producer surplus would be smaller than any possible loss of consumer surplus.
Free
Multiple Choice
Q 400Q 400
Suppose that the equilibrium price in the market for widgets is $5. If a law increased the minimum legal price for widgets to $6,
A) the resulting increase in consumer surplus would be larger than any possible loss of producer surplus.
B) the resulting increase in consumer surplus would be smaller than any possible loss of producer surplus.
C) any possible increase in producer surplus would be larger than the loss of consumer surplus.
D) any possible increase in producer surplus would be smaller than the loss of consumer surplus.
Free
Multiple Choice
Q 401Q 401
Total surplus in a market will increase when the government
A) imposes a binding price floor or a binding price ceiling on that market.
B) imposes a tax on that market.
C) Both a and b are correct.
D) Neither a nor b is correct.
Free
Multiple Choice
Q 402Q 402
Total surplus in a market will increase when the government
A) imposes a tax on that market.
B) imposes a binding price floor on that market.
C) removes a binding price ceiling from that market.
D) None of the above is correct.
Free
Multiple Choice
Q 403Q 403
If a market is allowed to adjust freely to its equilibrium price and quantity, then an increase in demand will
A) increase producer surplus.
B) reduce producer surplus.
C) not affect producer surplus.
D) Any of the above are possible.
Free
Multiple Choice
Q 404Q 404
If a market is allowed to move freely to its equilibrium price and quantity, then an increase in supply will
A) increase consumer surplus.
B) reduce consumer surplus.
C) not affect consumer surplus.
D) Any of the above are possible.
Free
Multiple Choice
Q 405Q 405
A simultaneous increase in both the demand for MP3 players and the supply of MP3 players would imply that
A) both the value of MP3 players to consumers and the cost of producing MP3 players has increased.
B) both the value of MP3 players to consumers and the cost of producing MP3 players has decreased.
C) the value of MP3 players to consumers has decreased, and the cost of producing MP3 players has increased.
D) the value of MP3 players to consumers has increased, and the cost of producing MP3 players has decreased.
Free
Multiple Choice
Q 406Q 406
Tomato sauce and spaghetti noodles are complementary goods. A decrease in the price of tomatoes will
A) increase consumer surplus in the market for tomato sauce and decrease producer surplus in the market for spaghetti noodles.
B) increase consumer surplus in the market for tomato sauce and increase producer surplus in the market for spaghetti noodles.
C) decrease consumer surplus in the market for tomato sauce and increase producer surplus in the market for spaghetti noodles.
D) decrease consumer surplus in the market for tomato sauce and decrease producer surplus in the market for spaghetti noodles.
Free
Multiple Choice
Q 407Q 407
Hot dogs and hot dog buns are complements. An increase in the price of flour used to make hot dogs buns will
A) increase consumer surplus in the market for hot dog buns and decrease producer surplus in the market for hot dogs.
B) increase consumer surplus in the market for hot dogs and increase producer surplus in the market for hot dog buns.
C) decrease consumer surplus in the market for hot dog buns and increase producer surplus in the market for hot dogs.
D) decrease consumer surplus in the market for hot dog buns and decrease producer surplus in the market for hot dogs.
Free
Multiple Choice
Q 408Q 408
Steak and chicken are substitutes. A sharp reduction in the supply of steak would
A) increase consumer surplus in the market for steak and decrease producer surplus in the market for chicken.
B) increase consumer surplus in the market for steak and increase producer surplus in the market for chicken.
C) decrease consumer surplus in the market for steak and increase producer surplus in the market for chicken.
D) decrease consumer surplus in the market for steak and decrease producer surplus in the market for chicken.
Free
Multiple Choice
Q 409Q 409
Corn chips and potato chips are substitutes. Good weather that sharply increases the corn harvest would
A) increase consumer surplus in the market for corn chips and decrease producer surplus in the market for potato chips.
B) increase consumer surplus in the market for corn chips and increase producer surplus in the market for potato chips.
C) decrease consumer surplus in the market for corn chips and increase producer surplus in the market for potato chips.
D) decrease consumer surplus in the market for corn chips and decrease producer surplus in the market for potato chips.
Free
Multiple Choice
Q 410Q 410
PlayStations and PlayStation games are complementary goods. A technological advance in the production of PlayStations will
A) increase consumer surplus in the market for PlayStations and decrease producer surplus in the market for PlayStation games.
B) increase consumer surplus in the market for PlayStations and increase producer surplus in the market for PlayStation games.
C) decrease consumer surplus in the market for PlayStations and increase producer surplus in the market for PlayStation games.
D) decrease consumer surplus in the market for PlayStations and decrease producer surplus in the market for PlayStation games.
Free
Multiple Choice
Q 411Q 411
If the current allocation of resources in the market for hammers is inefficient, then it must be the case that
A) producer surplus exceeds consumer surplus in the market for hammers.
B) consumer surplus exceeds producer surplus in the market for hammers.
C) the sum of consumer surplus and producer surplus could be increased by moving to a different allocation of resources.
D) the costs that sellers of hammers are incurring could be reduced by moving to a different allocation of resources.
Free
Multiple Choice
Q 412Q 412
If the current allocation of resources in the market for wallpaper is efficient, then it must be the case that
A) producer surplus equals consumer surplus in the market for wallpaper.
B) the market for wallpaper is in equilibrium.
C) on the last unit of wallpaper that was produced and sold, the value to buyers exceeded the cost to sellers.
D) All of the above are correct.
Free
Multiple Choice
Q 413Q 413
Five hundred units of good x are currently bought and sold. The marginal buyer is willing to pay $40 for the 500th unit, and the cost to the marginal seller is $35 for the 500th unit . We know that
A) the equilibrium price of good x is somewhere between $35 and $40.
B) the equilibrium quantity of good x exceeds 500 units.
C) 500 units is not an efficient quantity of good x.
D) All of the above are correct.
Free
Multiple Choice