Question 1

Total surplus in a market will increase when the government

Accepted Answer

A)   imposes a binding price floor or a binding price ceiling on that market.
B)   imposes a tax on that market.
C)   Both a and b are correct.
D)   Neither a nor b is correct.E) A) and B)
F) C) and D)

Question 2

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

Accepted Answer

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

Question 3

Figure 7-10
 
-Refer to Figure 7-10.If the equilibrium price is $50,what is the producer surplus?

Accepted Answer

A)   $625
B)   $3,750
C)   $5,625
D)   $10,000E) A) and D)
F) None of the above

Question 4

Producer surplus measures the benefit to sellers from receiving a price above their costs.

Accepted Answer

A) True 
 B)False

Question 5

Figure 7-21
 
-Refer to Figure 7-21.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) B) and D)
F) A) and B)

Question 6

Kristi and Rebecca sell lemonade on the corner.It costs them 7 cents to make each cup.On a certain day,they sell 40 cups.Their producer surplus for that day amounts to $19.20.Kristi & Rebecca sold each cup for

Accepted Answer

A)   31 cents.
B)   38 cents.
C)   45 cents.
D)   55 cents.E) A) and D)
F) B) and C)

Question 7

Table 7-7
The following table represents the costs of five possible sellers.
 
-Refer to Table 7-7.If the market price is $900,the producer surplus in the market is

Accepted Answer

A)   $350.
B)   $550.
C)   $750.
D)   $1,000.E) All of the above
F) A) and C)

Question 8

Figure 7-13
 
-Refer to Figure 7-13.Suppose the price of the good is $400.Then,on the first unit of the good that is sold,producer surplus amounts to

Accepted Answer

A)   $200.
B)   $300.
C)   $400.
D)   $450.E) C) and D)
F) A) and D)

Question 9

If producing a soccer ball costs Jake $5,and he sells it for $40,his producer surplus is $45.

Accepted Answer

A) True 
 B)False

Question 10

If a market is allowed to move freely to its equilibrium price and quantity,then an increase in supply will

Accepted Answer

A)   increase consumer surplus.
B)   reduce consumer surplus.
C)   not affect consumer surplus.
D)   Any of the above are possible.E) A) and C)
F) None of the above

Question 11

Table 7-10
 
-Refer to Table 7-10.You and your best friend want to hire a professional photographer to take pictures of your two families.The table shows the costs of the four potential sellers in the local photography market.You and your friend take bids from the sellers.Who offers the two winning bids,and what do they offer to charge for the photography sessions?

Accepted Answer

A)   LeBron and Kobe; more than $450 but less than $600
B)   Kevin and Steve; more than $450 but less than $600
C)   LeBron and Kobe; more than $700
D)   Kevin and Steve; less than $400E) B) and D)
F) B) and C)

Question 12

Willingness to pay

Accepted Answer

A)   measures the value that a buyer places on a good.
B)   is the amount a seller actually receives for a good minus the minimum amount the seller is willing to accept.
C)   is the maximum amount a buyer is willing to pay minus the minimum amount a seller is willing to accept.
D)   is the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.E) A) and B)
F) All of the above

Question 13

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 the market price for the good is $20,who will purchase the good?

Accepted Answer

A)   Ming-la only
B)   Carlos and Quilana only
C)   Quilana and Wilbur only
D)   Quilana, Wilbur, and Ming-la onlyE) None of the above
F) A) and D)

Question 14

Figure 7-19
 
-Refer to Figure 7-19.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) B) and D)
F) None of the above

Question 15

Figure 7-19
 
-Refer to Figure 7-19.If the price were P1,producer surplus would be 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) A) and C)

Question 16

Producer surplus is

Accepted Answer

A)   measured using the demand curve for a good.
B)   always a negative number for sellers in a competitive market.
C)   the amount a seller is paid minus the cost of production.
D)   the opportunity cost of production minus the cost of producing goods that go unsold.E) B) and C)
F) A) and D)

Question 17

Figure 7-18
 
-Refer to Figure 7-18.At the equilibrium price,producer surplus is

Accepted Answer

A)   $480.
B)   $640.
C)   $1,120.
D)   $1,280.E) All of the above
F) A) and C)

Question 18

A seller is willing to sell a product only if the seller receives a price that is at least as great as the

Accepted Answer

A)   seller's producer surplus.
B)   seller's cost of production.
C)   seller's profit.
D)   average willingness to pay of buyers of the product.E) None of the above
F) B) and C)

Question 19

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 20

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

Accepted Answer

A) True 
 B)False

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

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 the market price for the good is $20,who will purchase the good?

Correct Answer
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Figure 7-18 -Refer to Figure 7-18.At the equilibrium price,producer surplus is

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Figure 7-19 -Refer to Figure 7-19.At equilibrium,producer surplus is represented by the area

Correct Answer
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Figure 7-13 -Refer to Figure 7-13.Suppose the price of the good is $400.Then,on the first unit of the good that is sold,producer surplus amounts to

Correct Answer
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If producing a soccer ball costs Jake $5,and he sells it for $40,his producer surplus is $45.

Correct Answer
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Willingness to pay

Correct Answer
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Figure 7-21 -Refer to Figure 7-21.If the government mandated a price increase from P1 to a higher price,then

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

Correct Answer
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Producer surplus measures the benefit to sellers from receiving a price above their costs.

Correct Answer
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A seller is willing to sell a product only if the seller receives a price that is at least as great as the

Correct Answer
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Total surplus in a market will increase when the government

Correct Answer
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Figure 7-10 -Refer to Figure 7-10.If the equilibrium price is $50,what is the producer surplus?

Correct Answer
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Figure 7-19 -Refer to Figure 7-19.If the price were P1,producer surplus would be represented by the area

Correct Answer
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If a market is allowed to move freely to its equilibrium price and quantity,then an increase in supply will

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

Correct Answer
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Producer surplus is

Correct Answer
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Kristi and Rebecca sell lemonade on the corner.It costs them 7 cents to make each cup.On a certain day,they sell 40 cups.Their producer surplus for that day amounts to $19.20.Kristi & Rebecca sold each cup for

Correct Answer
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Figure 7-12 -Refer to Figure 7-12.When the price rises from P1 to P2,what area represents the increase in 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.If the market price is $900,the producer surplus in the market is

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

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 the market price for the good is $20,who will purchase the good?

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Figure 7-18 -Refer to Figure 7-18.At the equilibrium price,producer surplus is

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Figure 7-19 -Refer to Figure 7-19.At equilibrium,producer surplus is represented by the area

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Figure 7-13 -Refer to Figure 7-13.Suppose the price of the good is $400.Then,on the first unit of the good that is sold,producer surplus amounts to

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If producing a soccer ball costs Jake $5,and he sells it for $40,his producer surplus is $45.

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Willingness to pay

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Figure 7-21 -Refer to Figure 7-21.If the government mandated a price increase from P1 to a higher price,then

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

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Producer surplus measures the benefit to sellers from receiving a price above their costs.

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A seller is willing to sell a product only if the seller receives a price that is at least as great as the

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Total surplus in a market will increase when the government

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Figure 7-10 -Refer to Figure 7-10.If the equilibrium price is $50,what is the producer surplus?

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Figure 7-19 -Refer to Figure 7-19.If the price were P1,producer surplus would be represented by the area

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If a market is allowed to move freely to its equilibrium price and quantity,then an increase in supply will

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

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Producer surplus is

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Kristi and Rebecca sell lemonade on the corner.It costs them 7 cents to make each cup.On a certain day,they sell 40 cups.Their producer surplus for that day amounts to $19.20.Kristi & Rebecca sold each cup for

Correct AnswerverifiedShow Answer

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

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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 $900,the producer surplus in the market is

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