Question 1

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?

Accepted Answer

A)  $50.
B)  $250.
C)  $300.
D)  $550.E) A) and B)
F) A) and C)

Question 2

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

Accepted Answer

A)  $15.
B)  $30.
C)  $45.
D)  $90.E) A) and B)
F) A) and C)

Question 3

Corn chips and potato chips are substitutes. Good weather that sharply increases the corn harvest would

Accepted Answer

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

Question 4

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

Accepted Answer

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

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 additional consumer surplus do consumers initially in the market at the $10 price receive?

Accepted Answer

The consumers initially in the...

Question 6

The French expression used by free-market advocates, which literally translates as "allow them to do," is

Accepted Answer

A)  laissez-faire.
B)  je ne sais pas.
C)  si'l vous plait.
D)  tête-à-tête.E) A) and D)
F) B) and C)

Question 7

Producer surplus measures the

Accepted Answer

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

Question 8

Joel has a 1966 Mustang, which he sells to Susie, an avid car collector. Susie is pleased since she paid $8,000 for the car but would have been willing to pay $11,000 for the car. Susie's consumer surplus is $2,000.

Accepted Answer

A) True 
 B)False

Question 9

Figure 7-22 
-Refer to Figure 7-22. If 110 units of the good are bought and sold, then

Accepted Answer

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.E) None of the above
F) B) and C)

Question 10

Inefficiency can be caused in a market by the presence of

Accepted Answer

A)  market power.
B)  externalities.
C)  imperfectly competitive markets.
D)  All of the above are correct.E) All of the above
F) B) and C)

Question 11

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?

Accepted Answer

A)  $15,000
B)  $3,750
C)  $7,500
D)  $30,000E) A) and B)
F) A) and C)

Question 12

Let P represent price; let QS represent quantity supplied; and assume the equation of the supply curve is  
 . If 90 units of the good are produced and sold, then producer surplus amounts to $1,350.

Accepted Answer

A) True 
 B)False

Question 13

Figure 7-32 
-Refer to Figure 7-32. If the government imposed a price ceiling at $20 in this market, how much are consumer surplus, producer surplus, and total surplus?

Accepted Answer

Consumer surplus is ...

Question 14

In a market, the marginal buyer is the buyer

Accepted Answer

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

Question 15

Figure 7-9 
-Refer to Figure 7-9. If producer surplus is $19, then the price of the good is

Accepted Answer

A)  $11.50.
B)  $14.50.
C)  $13.50.
D)  $9.75.E) A) and C)
F) A) and B)

Question 16

Table 7-12
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
Seller
Cost
Marcia
$200
Jan
$250
Cindy
$350
Greg
$400
Peter
$700
Bobby
$800
-Refer to Table 7-12. The equilibrium market price for 10 piano lessons is $300. What is the total producer surplus in the market?

Accepted Answer

A)  $50
B)  $150
C)  $1,050
D)  $1,500E) None of the above
F) All of the above

Question 17

Figure 7-27 
-Refer to Figure 7-27. Buyers who value this good more than the equilibrium price are represented by which line segment?

Accepted Answer

A)  AC.
B)  CK.
C)  BC.
D)  CH.E) None of the above
F) B) and C)

Question 18

At present, the maximum legal price for a human kidney is $0. The price of $0 maximizes

Accepted Answer

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.E) A) and D)
F) None of the above

Question 19

Laissez-faire is a French expression which literally means

Accepted Answer

A)  to make do.
B)  to get involved.
C)  whatever works.
D)  allow them to do.E) A) and B)
F) A) and C)

Question 20

Figure 7-20 
-Refer to Figure 7-20. For quantities greater than M, the value to the marginal buyer is

Accepted Answer

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

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

Inefficiency can be caused in a market by the presence of

Correct Answer
verified

Correct Answer
verified

Figure 7-20 -Refer to Figure 7-20. For quantities greater than M, the value to the marginal buyer is

Correct Answer
verified

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

Correct Answer
verified

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?

Correct Answer
verified

Laissez-faire is a French expression which literally means

Correct Answer
verified

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

Correct Answer
verified

Producer surplus measures the

Correct Answer
verified

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?

Correct Answer
verified

Figure 7-27 -Refer to Figure 7-27. Buyers who value this good more than the equilibrium price are represented by which line segment?

Correct Answer
verified

Figure 7-9 -Refer to Figure 7-9. If producer surplus is $19, then the price of the good is

Correct Answer
verified

Let P represent price; let QS represent quantity supplied; and assume the equation of the supply curve is . If 90 units of the good are produced and sold, then producer surplus amounts to $1,350.

Correct Answer
verified

The French expression used by free-market advocates, which literally translates as "allow them to do," is

Correct Answer
verified

Figure 7-22 -Refer to Figure 7-22. If 110 units of the good are bought and sold, then

Correct Answer
verified

Corn chips and potato chips are substitutes. Good weather that sharply increases the corn harvest would

Correct Answer
verified

Joel has a 1966 Mustang, which he sells to Susie, an avid car collector. Susie is pleased since she paid $8,000 for the car but would have been willing to pay $11,000 for the car. Susie's consumer surplus is $2,000.

Correct Answer
verified

In a market, the marginal buyer is the buyer

Correct Answer
verified

Figure 7-32 -Refer to Figure 7-32. If the government imposed a price ceiling at $20 in this market, how much are consumer surplus, producer surplus, and total surplus?

Correct Answer
verified
Consumer surplus is ...
View Answer

At present, the maximum legal price for a human kidney is $0. The price of $0 maximizes

Correct Answer
verified

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 additional consumer surplus do consumers initially in the market at the $10 price receive?

Correct Answer
verified
The consumers initially in the...
View Answer

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

Inefficiency can be caused in a market by the presence of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 7-20 -Refer to Figure 7-20. For quantities greater than M, the value to the marginal buyer is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 7-12 -Refer to Figure 7-12. If the equilibrium price rises from $200 to $350, what is the producer surplus to new producers?

Correct AnswerverifiedShow Answer

Laissez-faire is a French expression which literally means

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Producer surplus measures the

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Figure 7-27 -Refer to Figure 7-27. Buyers who value this good more than the equilibrium price are represented by which line segment?

Correct AnswerverifiedShow Answer

Figure 7-9 -Refer to Figure 7-9. If producer surplus is $19, then the price of the good is

Correct AnswerverifiedShow Answer

Let P represent price; let QS represent quantity supplied; and assume the equation of the supply curve is . If 90 units of the good are produced and sold, then producer surplus amounts to $1,350.

Correct AnswerverifiedShow Answer

The French expression used by free-market advocates, which literally translates as "allow them to do," is

Correct AnswerverifiedShow Answer

Figure 7-22 -Refer to Figure 7-22. If 110 units of the good are bought and sold, then

Correct AnswerverifiedShow Answer

Corn chips and potato chips are substitutes. Good weather that sharply increases the corn harvest would

Correct AnswerverifiedShow Answer

Joel has a 1966 Mustang, which he sells to Susie, an avid car collector. Susie is pleased since she paid $8,000 for the car but would have been willing to pay $11,000 for the car. Susie's consumer surplus is $2,000.

Correct AnswerverifiedShow Answer

In a market, the marginal buyer is the buyer

Correct AnswerverifiedShow Answer

Figure 7-32 -Refer to Figure 7-32. If the government imposed a price ceiling at $20 in this market, how much are consumer surplus, producer surplus, and total surplus?

Correct AnswerverifiedConsumer surplus is ...View AnswerShow Answer

At present, the maximum legal price for a human kidney is $0. The price of $0 maximizes

Correct AnswerverifiedShow Answer

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 additional consumer surplus do consumers initially in the market at the $10 price receive?

Correct AnswerverifiedThe consumers initially in the...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Consumer surplus is ...
View Answer

Correct Answer
verified

Correct Answer
verified
The consumers initially in the...
View Answer