Question 1

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 value to buyers minus the cost to sellers.
D)   All of the above are correct.E) B) and D)
F) C) and D)

Question 2

Total surplus in a market is consumer surplus minus producer surplus.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A)   $15 or slightly less.
B)   $25 or slightly more.
C)   $35 or slightly more.
D)   $45 or slightly less.E) A) and B)
F) None of the above

Question 4

Figure 7-28 
-Refer to Figure 7-28. At the quantity Q2, the marginal value to buyers

Accepted Answer

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

Question 5

Figure 7-7 
-Refer to Figure 7-7. What happens to the consumer surplus if the price rises from $100 to $150?

Accepted Answer

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

Question 6

Figure 7-1 
-Refer to Figure 7-1. If the price of the good is $50, then consumer surplus amounts to

Accepted Answer

A)   $400.
B)   $500.
C)   $600.
D)   $750.E) A) and D)
F) None of the above

Question 7

Figure 7-26 
-Refer to Figure 7-26. At the equilibrium price, producer surplus is

Accepted Answer

A)   $600.
B)   $900.
C)   $1,200.
D)   $1,800.E) All of the above
F) C) and D)

Question 8

Figure 7-32 
-Refer to Figure 7-32. How much are consumer surplus, producer surplus, and total surplus at the market equilibrium price?

Accepted Answer

.Consumer surplus is...

Question 9

Producer surplus directly measures

Accepted Answer

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

Question 10

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) B) and C)
F) C) and D)

Question 11

Figure 7-4 
-Refer to Figure 7-4. Which area represents consumer surplus at a price of P2?

Accepted Answer

A)   BDF
B)   AFG
C)   ABDG
D)   ABCE) C) and D)
F) None of the above

Question 12

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

Accepted Answer

A)   $1000.
B)   $300.
C)   $1,700.
D)   $700.E) B) and D)
F) None of the above

Question 13

Figure 7-24 
-Refer to Figure 7-24. At equilibrium, total surplus is measured by the area

Accepted Answer

A)   ABD.
B)   ABF.
C)   FBD.
D)   HGCI.E) A) and D)
F) A) and C)

Question 14

Figure 7-23 
-Refer to Figure 7-23. At equilibrium, producer surplus is represented by the area

Accepted Answer

A)   F.
B)   F+G.
C)   D+H+F.
D)   D+H+F+G+I.E) A) and B)
F) B) and C)

Question 15

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

Accepted Answer

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

Question 16

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

Accepted Answer

A)   $625
B)   $2,500
C)   $3,125
D)   $5,625E) B) and C)
F) A) and B)

Question 17

If a consumer places a value of $20 on a particular good and if the price of the good is $25, then the

Accepted Answer

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

Question 18

Figure 7-14 
-Refer to Figure 7-14. At the equilibrium price, producer surplus is

Accepted Answer

A)   $800.
B)   $400.
C)   $450.
D)   $900.E) A) and D)
F) C) and D)

Question 19

Figure 7-27 
-Refer to Figure 7-27. If the government mandated a price increase from P1 to a higher price, then

Accepted Answer

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

Question 20

Tammy loves donuts. The table shown reflects the value Tammy places on each donut she eats:
  
a. Use this information to construct Tammy's demand curve for donuts.
b. If the price of donuts is $0.20, how many donuts will Tammy buy?
c. Show Tammy's consumer surplus on your graph. How much consumer surplus would she have at a price of $0.20?
d. If the price of donuts rose to $0.40, how many donuts would she purchase now? What would happen to Tammy's consumer surplus? Show this change on your graph.

Accepted Answer

a.
.

b. At a price of $0.20, Tammy wou...

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

Total surplus in a market is consumer surplus minus producer surplus.

Correct Answer
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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

Correct Answer
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Figure 7-14 -Refer to Figure 7-14. At the equilibrium price, producer surplus is

Correct Answer
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If a consumer places a value of $20 on a particular good and if the price of the good is $25, then the

Correct Answer
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Figure 7-27 -Refer to Figure 7-27. If the government mandated a price increase from P1 to a higher price, then

Correct Answer
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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

Correct Answer
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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

Correct Answer
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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
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Figure 7-32 -Refer to Figure 7-32. How much are consumer surplus, producer surplus, and total surplus at the market equilibrium price?

Correct Answer
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.Consumer surplus is...
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a.
.
b. At a price of $0.20, Tammy wou...
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Figure 7-1 -Refer to Figure 7-1. If the price of the good is $50, then consumer surplus amounts to

Correct Answer
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Figure 7-23 -Refer to Figure 7-23. At equilibrium, producer surplus is represented by the area

Correct Answer
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Producer surplus directly measures

Correct Answer
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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

Correct Answer
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Figure 7-26 -Refer to Figure 7-26. At the equilibrium price, producer surplus is

Correct Answer
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Figure 7-4 -Refer to Figure 7-4. Which area represents consumer surplus at a price of P2?

Correct Answer
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Total surplus

Correct Answer
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Figure 7-7 -Refer to Figure 7-7. What happens to the consumer surplus if the price rises from $100 to $150?

Correct Answer
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Figure 7-24 -Refer to Figure 7-24. At equilibrium, total surplus is measured by the area

Correct Answer
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Figure 7-28 -Refer to Figure 7-28. At the quantity Q2, the marginal value to buyers

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

Total surplus in a market is consumer surplus minus producer surplus.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 7-14 -Refer to Figure 7-14. At the equilibrium price, producer surplus is

Correct AnswerverifiedShow Answer

If a consumer places a value of $20 on a particular good and if the price of the good is $25, then the

Correct AnswerverifiedShow Answer

Figure 7-27 -Refer to Figure 7-27. If the government mandated a price increase from P1 to a higher price, then

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

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

Figure 7-32 -Refer to Figure 7-32. How much are consumer surplus, producer surplus, and total surplus at the market equilibrium price?

Correct Answerverified.Consumer surplus is...View AnswerShow Answer

Correct Answerverifieda.. b. At a price of $0.20, Tammy wou...View AnswerShow Answer

Figure 7-1 -Refer to Figure 7-1. If the price of the good is $50, then consumer surplus amounts to

Correct AnswerverifiedShow Answer

Figure 7-23 -Refer to Figure 7-23. At equilibrium, producer surplus is represented by the area

Correct AnswerverifiedShow Answer

Producer surplus directly measures

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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

Correct AnswerverifiedShow Answer

Figure 7-26 -Refer to Figure 7-26. At the equilibrium price, producer surplus is

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Figure 7-4 -Refer to Figure 7-4. Which area represents consumer surplus at a price of P2?

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Total surplus

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Figure 7-7 -Refer to Figure 7-7. What happens to the consumer surplus if the price rises from $100 to $150?

Correct AnswerverifiedShow Answer

Figure 7-24 -Refer to Figure 7-24. At equilibrium, total surplus is measured by the area

Correct AnswerverifiedShow Answer

Figure 7-28 -Refer to Figure 7-28. At the quantity Q2, the marginal value to buyers

Correct AnswerverifiedShow Answer

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.Consumer surplus is...
View Answer

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b. At a price of $0.20, Tammy wou...
View Answer

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