Question 1

All else equal,an increase in supply will cause an increase in consumer surplus.

Accepted Answer

A) True 
 B)False

Question 2

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.Who makes the winning bid,and what does he offer to pay for the ticket?

Accepted Answer

A)   Michael; $501
B)   Michael; more than $400 but less than or equal to $500
C)   Earvin; $400
D)   Earvin; more than $350 but less than or equal to $400E) B) and C)
F) B) and D)

Question 3

The particular price that results in quantity supplied being equal to quantity demanded is the best price because it

Accepted Answer

A)   maximizes costs of the seller.
B)   maximizes tax revenue for the government.
C)   maximizes the combined welfare of buyers and sellers.
D)   minimizes the expenditure of buyers.E) A) and B)
F) A) and C)

Question 4

Moving production from a high-cost producer to a low-cost producer will

Accepted Answer

A)   lower total surplus.
B)   raise total surplus.
C)   lower producer surplus.
D)   raise producer surplus but lower consumer surplus.E) A) and B)
F) C) and D)

Question 5

If the current allocation of resources in the market for hammers is inefficient,then it must be the case that

Accepted Answer

A)   producer surplus exceeds consumer surplus in the market for hammers.
B)   consumer surplus exceeds producer surplus in the market for hammers.
C)   the sum of consumer surplus and producer surplus could be increased by moving to a different allocation of resources.
D)   the costs that sellers of hammers are incurring could be reduced by moving to a different allocation of resources.E) None of the above
F) A) and B)

Question 6

Figure 7-13 
-Refer to Figure 7-13.If the price of the good is $600,then

Accepted Answer

A)   consumer surplus is $800.
B)   consumer surplus is $900.
C)   producer surplus is $900.
D)   producer surplus is $1,000.E) A) and B)
F) B) and C)

Question 7

If the government imposes a binding price ceiling in a market,then the producer surplus in that market will increase.

Accepted Answer

A) True 
 B)False

Question 8

Figure 7-14 
-Refer to Figure 7-14.Total surplus amounts to $800 if consumer surplus amounts to

Accepted Answer

A)   $450 and if the price of the good is $250.
B)   $450 and if the price of the good is $300.
C)   $350 and if the price of the good is $300.
D)   $250 and if the price of the good is $325.E) A) and D)
F) A) and C)

Question 9

Table 7-7
The following table represents the costs of five possible sellers.
 
-Refer to Table 7-7.Suppose each of the five sellers can supply at most one unit of the good.The market quantity supplied is exactly 4 if the price is

Accepted Answer

A)   $770.
B)   $970.
C)   $1,170.
D)   $1,370.E) A) and C)
F) None of the above

Question 10

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

Question 11

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) A) and C)

Question 12

Producer surplus is the

Accepted Answer

A)   area under the supply curve to the left of the amount sold.
B)   amount a seller is paid minus the cost of production.
C)   area between the supply and demand curves,above the equilibrium price.
D)   cost to sellers of participating in a market.E) A) and B)
F) All of the above

Question 13

The current policy on kidney donation effectively sets a price ceiling of zero.

Accepted Answer

A) True 
 B)False

Question 14

Figure 7-11 
-Refer to Figure 7-11.If the government imposes a price ceiling of $70 in this market,then the new producer surplus will be

Accepted Answer

A)   $50.
B)   $100.
C)   $175.
D)   $350.E) A) and C)
F) A) and B)

Question 15

At Nick's Bakery,the cost to make homemade chocolate cake is $3 per cake.As a result of selling three cakes,Nick experiences a producer surplus in the amount of $19.50.Nick must be selling his cakes for

Accepted Answer

A)   $6.50 each.
B)   $7.50 each.
C)   $9.50 each.
D)   $10.50 each.E) All of the above
F) A) and D)

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

Moving production from a high-cost producer to a low-cost producer will

Correct Answer
verified

Figure 7-11 -Refer to Figure 7-11.If the government imposes a price ceiling of $70 in this market,then the new producer surplus will be

Correct Answer
verified

The current policy on kidney donation effectively sets a price ceiling of zero.

Correct Answer
verified

Figure 7-14 -Refer to Figure 7-14.Total surplus amounts to $800 if consumer surplus amounts to

Correct Answer
verified

Table 7-7 The following table represents the costs of five possible sellers. -Refer to Table 7-7.Suppose each of the five sellers can supply at most one unit of the good.The market quantity supplied is exactly 4 if the price is

Correct Answer
verified

The particular price that results in quantity supplied being equal to quantity demanded is the best price because it

Correct Answer
verified

If the current allocation of resources in the market for hammers is inefficient,then it must be the case that

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
verified

Figure 7-13 -Refer to Figure 7-13.If the price of the good is $600,then

Correct Answer
verified

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

Correct Answer
verified

At Nick's Bakery,the cost to make homemade chocolate cake is $3 per cake.As a result of selling three cakes,Nick experiences a producer surplus in the amount of $19.50.Nick must be selling his cakes for

Correct Answer
verified

All else equal,an increase in supply will cause an increase in consumer surplus.

Correct Answer
verified

Producer surplus is the

Correct Answer
verified

Correct Answer
verified

If the government imposes a binding price ceiling in a market,then the producer surplus in that market will increase.

Correct Answer
verified

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

Moving production from a high-cost producer to a low-cost producer will

Correct AnswerverifiedShow Answer

Figure 7-11 -Refer to Figure 7-11.If the government imposes a price ceiling of $70 in this market,then the new producer surplus will be

Correct AnswerverifiedShow Answer

The current policy on kidney donation effectively sets a price ceiling of zero.

Correct AnswerverifiedShow Answer

Figure 7-14 -Refer to Figure 7-14.Total surplus amounts to $800 if consumer surplus amounts to

Correct AnswerverifiedShow Answer

Table 7-7 The following table represents the costs of five possible sellers. -Refer to Table 7-7.Suppose each of the five sellers can supply at most one unit of the good.The market quantity supplied is exactly 4 if the price is

Correct AnswerverifiedShow Answer

The particular price that results in quantity supplied being equal to quantity demanded is the best price because it

Correct AnswerverifiedShow Answer

If the current allocation of resources in the market for hammers is inefficient,then it must be the case that

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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 7-13 -Refer to Figure 7-13.If the price of the good is $600,then

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

At Nick's Bakery,the cost to make homemade chocolate cake is $3 per cake.As a result of selling three cakes,Nick experiences a producer surplus in the amount of $19.50.Nick must be selling his cakes for

Correct AnswerverifiedShow Answer

All else equal,an increase in supply will cause an increase in consumer surplus.

Correct AnswerverifiedShow Answer

Producer surplus is the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the government imposes a binding price ceiling in a market,then the producer surplus in that market will increase.

Correct AnswerverifiedShow Answer

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