Question 1

Economists say that a market where goods are not consumed by those valuing the goods most highly is

Accepted Answer

A)   laissez-faire..
B)   unequal.
C)   inefficient.
D)   rational.E) A) and B)
F) A) and C)

Question 2

Figure 7-9
 
-Refer to Figure 7-9.If the supply curve is S,the demand curve is D,and the equilibrium price is $100,what is the producer surplus?

Accepted Answer

A)   $625
B)   $1,250
C)   $2,500
D)   $5,000E) C) and D)
F) All of the above

Question 3

Coffee and tea are substitutes.Bad weather that sharply reduces the coffee bean harvest would

Accepted Answer

A)   increase consumer surplus in the market for coffee and decrease producer surplus in the market for tea.
B)   increase consumer surplus in the market for coffee and increase producer surplus in the market for tea.
C)   decrease consumer surplus in the market for coffee and increase producer surplus in the market for tea.
D)   decrease consumer surplus in the market for coffee and decrease producer surplus in the market for tea.E) B) and C)
F) A) and D)

Question 4

Consumer surplus

Accepted Answer

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

Question 5

Figure 7-3
 
-Refer to Figure 7-3.Which area represents consumer surplus at a price of P1?

Accepted Answer

A)   ABD
B)   ACG
C)   BCDF
D)   DFGE) B) and C)
F) None of the above

Question 6

Table 7-1
 
-Refer to Table 7-1.If the price of the product is $18,then the total consumer surplus is

Accepted Answer

A)   $38.
B)   $42.
C)   $46.
D)   $72.E) None of the above
F) B) and D)

Question 7

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

Accepted Answer

A)   $5.
B)   $15.
C)   $20.
D)   $35.E) None of the above
F) C) and D)

Question 8

Table 7-7
The following table represents the costs of five possible sellers.
 
-Refer to Table 7-7.Who is a marginal seller when the price is $1,200?

Accepted Answer

A)   Bobby
B)   Bobby and Abby
C)   Carlos, Dianne, and Evalina
D)   Carlos, Dianne, Evalina, and BobbyE) None of the above
F) B) and D)

Question 9

Figure 7-16
 
-Refer to Figure 7-16.For quantities less 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) B) and C)
F) A) and C)

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

If the government imposes a binding price floor in a market,then the consumer surplus in that market will decrease.

Accepted Answer

A) True 
 B)False

Question 12

Another way to think of the marginal seller is the seller who

Accepted Answer

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

Question 13

Figure 7-9
 
-Refer to Figure 7-9.If the supply curve is S',the demand curve is D,and the equilibrium price is $150,what is the producer surplus?

Accepted Answer

A)   $625
B)   $1,250
C)   $2,500
D)   $5,000E) B) and D)
F) A) and B)

Question 14

Suppose that Firms A and B each produce high-resolution computer monitors,but Firm A can do so at a lower cost.Cassie and David each want to purchase a high-resolution computer monitor,but David is willing to pay more than Cassie.Which of the following market outcomes is efficient?

Accepted Answer

A)   Firm A produces a monitor that Cassie buys. David does not purchase a monitor.
B)   Firm A produces a monitor that David buys.
C)   Firm B produces a monitor that Cassie buys. David does not purchase a monitor.
D)   Firm B produces a monitor that David buys.E) All of the above
F) A) and B)

Question 15

Table 7-7
The following table represents the costs of five possible sellers.
 
-Refer to Table 7-7.If the market price is $1,100,the combined total cost of all participating sellers is

Accepted Answer

A)   $3,700.
B)   $2,700.
C)   $2,250.
D)   $1,250.E) All of the above
F) C) and D)

Question 16

Table 7-6
 
-Refer to Table 7-6.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?

Accepted Answer

A)   $410
B)   $90
C)   $10
D)   $0E) C) and D)
F) None of the above

Question 17

Even though participants in the economy are motivated by self-interest,the "invisible hand" of the marketplace guides this self-interest into promoting general economic well-being.

Accepted Answer

A) True 
 B)False

Question 18

When demand increases so that market price increases,producer surplus increases because (1)producer surplus received by existing sellers increases,and (2)new sellers enter the market.

Accepted Answer

A) True 
 B)False

Question 19

If the United States changed its laws to allow for the legal sale of a kidney,which of the following is likely to occur?

Accepted Answer

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

Question 20

Figure 7-12
 
-Refer to Figure 7-12.When the price rises from P1 to P2,which area represents the increase in producer surplus to existing producers?

Accepted Answer

A)   A
B)   A+B
C)   A+B+C
D)   GE) B) and C)
F) A) and D)

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

Correct Answer
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All else equal,an increase in demand will cause an increase in producer surplus.

Correct Answer
verified

Coffee and tea are substitutes.Bad weather that sharply reduces the coffee bean harvest would

Correct Answer
verified

When demand increases so that market price increases,producer surplus increases because (1)producer surplus received by existing sellers increases,and (2)new sellers enter the market.

Correct Answer
verified

Table 7-1 -Refer to Table 7-1.If the price of the product is $18,then the total consumer surplus is

Correct Answer
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Figure 7-9 -Refer to Figure 7-9.If the supply curve is S,the demand curve is D,and the equilibrium price is $100,what is the producer surplus?

Correct Answer
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Table 7-7 The following table represents the costs of five possible sellers. -Refer to Table 7-7.Who is a marginal seller when the price is $1,200?

Correct Answer
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Table 7-7 The following table represents the costs of five possible sellers. -Refer to Table 7-7.If the market price is $1,100,the combined total cost of all participating sellers is

Correct Answer
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Figure 7-16 -Refer to Figure 7-16.For quantities less than M,the value to the marginal buyer is

Correct Answer
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If the United States changed its laws to allow for the legal sale of a kidney,which of the following is likely to occur?

Correct Answer
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Figure 7-12 -Refer to Figure 7-12.When the price rises from P1 to P2,which area represents the increase in producer surplus to existing producers?

Correct Answer
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Economists say that a market where goods are not consumed by those valuing the goods most highly is

Correct Answer
verified

Figure 7-3 -Refer to Figure 7-3.Which area represents consumer surplus at a price of P1?

Correct Answer
verified

Consumer surplus

Correct Answer
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If the government imposes a binding price floor in a market,then the consumer surplus in that market will decrease.

Correct Answer
verified

Even though participants in the economy are motivated by self-interest,the "invisible hand" of the marketplace guides this self-interest into promoting general economic well-being.

Correct Answer
verified

Suppose that Firms A and B each produce high-resolution computer monitors,but Firm A can do so at a lower cost.Cassie and David each want to purchase a high-resolution computer monitor,but David is willing to pay more than Cassie.Which of the following market outcomes is efficient?

Correct Answer
verified

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

Correct Answer
verified

Another way to think of the marginal seller is the seller who

Correct Answer
verified

Figure 7-9 -Refer to Figure 7-9.If the supply curve is S',the demand curve is D,and the equilibrium price is $150,what is the producer surplus?

Correct Answer
verified

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Coffee and tea are substitutes.Bad weather that sharply reduces the coffee bean harvest would

Correct AnswerverifiedShow Answer

When demand increases so that market price increases,producer surplus increases because (1)producer surplus received by existing sellers increases,and (2)new sellers enter the market.

Correct AnswerverifiedShow Answer

Table 7-1 -Refer to Table 7-1.If the price of the product is $18,then the total consumer surplus is

Correct AnswerverifiedShow Answer

Figure 7-9 -Refer to Figure 7-9.If the supply curve is S,the demand curve is D,and the equilibrium price is $100,what is the producer surplus?

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Table 7-7 The following table represents the costs of five possible sellers. -Refer to Table 7-7.Who is a marginal seller when the price is $1,200?

Correct AnswerverifiedShow Answer

Table 7-7 The following table represents the costs of five possible sellers. -Refer to Table 7-7.If the market price is $1,100,the combined total cost of all participating sellers is

Correct AnswerverifiedShow Answer

Figure 7-16 -Refer to Figure 7-16.For quantities less than M,the value to the marginal buyer is

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If the United States changed its laws to allow for the legal sale of a kidney,which of the following is likely to occur?

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Figure 7-12 -Refer to Figure 7-12.When the price rises from P1 to P2,which area represents the increase in producer surplus to existing producers?

Correct AnswerverifiedShow Answer

Economists say that a market where goods are not consumed by those valuing the goods most highly is

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Figure 7-3 -Refer to Figure 7-3.Which area represents consumer surplus at a price of P1?

Correct AnswerverifiedShow Answer

Consumer surplus

Correct AnswerverifiedShow Answer

If the government imposes a binding price floor in a market,then the consumer surplus in that market will decrease.

Correct AnswerverifiedShow Answer

Even though participants in the economy are motivated by self-interest,the "invisible hand" of the marketplace guides this self-interest into promoting general economic well-being.

Correct AnswerverifiedShow Answer

Suppose that Firms A and B each produce high-resolution computer monitors,but Firm A can do so at a lower cost.Cassie and David each want to purchase a high-resolution computer monitor,but David is willing to pay more than Cassie.Which of the following market outcomes is efficient?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Another way to think of the marginal seller is the seller who

Correct AnswerverifiedShow Answer

Figure 7-9 -Refer to Figure 7-9.If the supply curve is S',the demand curve is D,and the equilibrium price is $150,what is the producer surplus?

Correct AnswerverifiedShow Answer

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