Question 1

Figure 7-12 
-Refer to Figure 7-12.When the price is P1,producer surplus is

Accepted Answer

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

Question 2

Figure 7-6 
-Refer to Figure 7-6.At what price will total surplus be maximized in this market?

Accepted Answer

.Total surplus will ...

Question 3

Figure 7-12 
-Refer to Figure 7-12.Area A represents

Accepted Answer

A)   producer surplus to new producers entering the market as the result of an increase in price from P1 to P2.
B)   the increase in consumer surplus that results from an upward-sloping supply curve.
C)   the increase in total surplus when sellers are willing and able to increase supply from Q1 to Q2.
D)   the increase in producer surplus to those producers already in the market when the price increases from P1 to P2.E) B) and C)
F) C) and D)

Question 4

On a graph,consumer surplus is represented by the area

Accepted Answer

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.E) C) and D)
F) B) and C)

Question 5

Scenario 7-1
Suppose market demand is given by the equation 
-Refer to Scenario 7-1.If the market equilibrium price falls from $10 to $5,how much consumer surplus do consumers entering the market after the price drop receive?

Accepted Answer

The consumers enteri...

Question 6

Table 7-11
 
-Refer to Table 7-11.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

Accepted Answer

A)   $21.
B)   $28.
C)   $36.
D)   $42.E) A) and D)
F) None of the above

Question 7

Figure 7-20 
-Refer to Figure 7-20.At equilibrium,total surplus is measured by the area

Accepted Answer

A)   ACG.
B)   AFG.
C)   KBG.
D)   CFG.E) A) and C)
F) A) and B)

Question 8

Brock is willing to pay $400 for a new suit,but he is able to buy the suit for $350.His consumer surplus is

Accepted Answer

A)   $50.
B)   $150.
C)   $350.
D)   $400.E) A) and B)
F) A) and D)

Question 9

Figure 7-23 
-Refer to Figure 7-23.Which of the following statements is correct?

Accepted Answer

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.E) A) and B)
F) B) and C)

Question 10

Which of the following will cause no change in producer surplus?

Accepted Answer

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 inferiorE) A) and B)
F) All of the above

Question 11

Figure 7-2 
-Refer to Figure 7-2.If the equilibrium price is $60,what is the producer surplus?

Accepted Answer

A)   $600
B)   $1,200
C)   $2,400
D)   $4,800E) B) and C)
F) A) and B)

Question 12

Total surplus

Accepted Answer

A)   can be used to measure a market's efficiency.
B)   is the sum of consumer and producer surplus.
C)   is the to value to buyers minus the cost to sellers.
D)   All of the above are correct.E) B) and D)
F) B) and C)

Question 13

Consumer surplus

Accepted Answer

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.E) A) and B)
F) A) and C)

Question 14

Table 7-10
 
-Refer to Table 7-10.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?

Accepted Answer

A)  
B)  
C)  
D)  E) C) and D)
F) All of the above

Question 15

Figure 7-21 
-Refer to Figure 7-21.Buyers who value this good less than the equilibrium price are represented by which line segment?

Accepted Answer

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

Question 16

Table 7-2
The only four producers in a market have the following costs:
 
-Refer to Table 7-2.If the sellers bid against each other for the right to sell the good to a single consumer,then the good will sell for

Accepted Answer

A)   $30 or slightly more.
B)   $40 or slightly less.
C)   $55 or slightly less.
D)   $65 or slightly less.E) A) and C)
F) B) and D)

Question 17

Table 7-8
The only four producers in a market have the following costs:
 
-Refer to Table 7-8.If Evan,Selena,and Angie sell the good,and the resulting producer surplus is $300,then the price must have been

Accepted Answer

A)   $200.
B)   $300.
C)   $450.
D)   $600.E) All of the above
F) C) and D)

Question 18

Total surplus in a market is equal to

Accepted Answer

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.E) A) and C)
F) All of the above

Question 19

Figure 7-2 
-Refer to Figure 7-2.If the equilibrium price rises from $60 to $120,what is the producer surplus to new producers in the market?

Accepted Answer

A)   $1,200
B)   $2,400
C)   $3,600
D)   $4,800E) C) and D)
F) B) and C)

Question 20

Scenario 7-1
Suppose market demand is given by the equation 
-Refer to Scenario 7-1.If the market equilibrium price is $10,how much is total consumer surplus in this market?

Accepted Answer

Consumer s...

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

Figure 7-12 -Refer to Figure 7-12.When the price is P1,producer surplus is

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Scenario 7-1 Suppose market demand is given by the equation -Refer to Scenario 7-1.If the market equilibrium price is $10,how much is total consumer surplus in this market?

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Scenario 7-1 Suppose market demand is given by the equation -Refer to Scenario 7-1.If the market equilibrium price falls from $10 to $5,how much consumer surplus do consumers entering the market after the price drop receive?

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Consumer surplus

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Figure 7-6 -Refer to Figure 7-6.At what price will total surplus be maximized in this market?

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Table 7-2 The only four producers in a market have the following costs: -Refer to Table 7-2.If the sellers bid against each other for the right to sell the good to a single consumer,then the good will sell for

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Table 7-11 -Refer to Table 7-11.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

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Table 7-8 The only four producers in a market have the following costs: -Refer to Table 7-8.If Evan,Selena,and Angie sell the good,and the resulting producer surplus is $300,then the price must have been

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Figure 7-2 -Refer to Figure 7-2.If the equilibrium price rises from $60 to $120,what is the producer surplus to new producers in the market?

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Table 7-10 -Refer to Table 7-10.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?

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Figure 7-20 -Refer to Figure 7-20.At equilibrium,total surplus is measured by the area

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On a graph,consumer surplus is represented by the area

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Brock is willing to pay $400 for a new suit,but he is able to buy the suit for $350.His consumer surplus is

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Figure 7-2 -Refer to Figure 7-2.If the equilibrium price is $60,what is the producer surplus?

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Total surplus in a market is equal to

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Which of the following will cause no change in producer surplus?

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Figure 7-23 -Refer to Figure 7-23.Which of the following statements is correct?

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Total surplus

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Figure 7-12 -Refer to Figure 7-12.Area A represents

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Figure 7-21 -Refer to Figure 7-21.Buyers who value this good less than the equilibrium price are represented by which line segment?

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Consumer s...
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The consumers enteri...
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.Total surplus will ...
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