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

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Question 121

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If John's willingness to pay for a good is $20 and the price of the good is $15, how much is John's consumer surplus from purchasing the good?

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Consumer s...

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Question 122

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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.

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

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Question 123

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Table 7-18 The following table shows the cost of producing a good for the only four producers in a market. -Refer to Table 7-18. If the market price is $28, which producers will supply units in the market?

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?

Table 7-9 The only four consumers in a market have the following willingness to pay for a good: -Refer to Table 7-9. If the market price for the good is $20, who will purchase the good?

Table 7-16 -Refer to Table 7-16. 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

Figure 7-30 -Refer to Figure 7-30. If the market equilibrium price falls from $120 to $80, how much consumer surplus do consumers entering the market after the price drop receive?

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 entering the market?

Figure 7-21 -Refer to Figure 7-21. When the price is P1, area C represents

Economists generally believe that, although there may be advantages to society from ticket-scalping, the costs to society of this activity outweigh the benefits.

Table 7-9 The only four consumers in a market have the following willingness to pay for a good: -Refer to Table 7-9. 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

Total surplus in a market will increase when the government

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

All else equal, a decrease in demand will cause an increase in producer surplus.

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

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

Figure 7-15 -Refer to Figure 7-15. When the price is P1, producer surplus is

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

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

Producer surplus is the amount a seller is paid minus the cost of production.