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

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Question 51

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Figure 7-15 -Refer to Figure 7-15. When the price rises from P1 to P2, which area represents the increase in producer surplus due to new producers entering the market?

A) A
B) B
C) A+B
D) G

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

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Question 52

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Table 7-5 For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day. -Refer to Table 7-5. If the market price of an orange is $0.40, then

A) 6 oranges are demanded per day, and consumer surplus amounts to $4.95.
B) 6 oranges are demanded per day, and consumer surplus amounts to $5.10.
C) 7 oranges are demanded per day, and consumer surplus amounts to $5.30.
D) 7 oranges are demanded per day, and consumer surplus amounts to $5.15.

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

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Question 53

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Figure 7-34 -Refer to Figure 7-34. Suppose there is initially a price floor set at $10 in this market. If the government removed the price floor, by how much would total consumer surplus increase?

Kristi sells purses. Her cost is $35 per purse. On a certain day, she sells 12 purses, and her producer surplus for that day amounts to $180. Kristi sold each purse for

Table 7-13 The only four producers in a market have the following costs: -Refer to Table 7-13. If Abbey, Bev, and Carl sell the good, and the resulting producer surplus is $55 altogether, then the price must have been

Table 7-5 For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day. -Refer to Table 7-5. Who experiences the largest gain in consumer surplus when the price of an orange decreases from $1.05 to $0.75?

Figure 7-24 -Refer to Figure 7-24. If 10 units of the good are produced and sold, then

Figure 7-12 -Refer to Figure 7-12. If the equilibrium price is $200, what is the producer surplus?

Figure 7-3 -Refer to Figure 7-3. When the price rises from P1 to P2, consumer surplus

Table 7-10 The following table represents the costs of five possible sellers. -Refer to Table 7-10. Who is a marginal seller when the price is $1,100?

Scenario 7-1 Suppose market demand is given by the equation -Refer to Scenario 7-1. If the market equilibrium price falls from $10 to $5, how much additional consumer surplus do consumers initially in the market at the $10 price receive?

Consumer surplus is

Table 7-10 The following table represents the costs of five possible sellers. -Refer to Table 7-10. Suppose each of the five sellers can supply at most one unit of the good. The market quantity supplied is exactly 2 if the price is

Total surplus in a market can be measured as the area below the supply curve plus the area above the demand curve, up to the point of equilibrium.

Producer surplus is

Ray buys a new tractor for $118,000. He receives consumer surplus of $13,000 on his purchase. Ray's willingness to pay is

Justin builds fences for a living. Justin's out-of-pocket expenses (for wood, paint, etc.) plus the value that he places on his own time amount to his

Which of the following statements is not correct?

Jeff decides that he would pay as much as $3,000 for a new laptop computer. He buys the computer and realizes consumer surplus of $700. How much did Jeff pay for his computer?

Table 7-12 The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality. -Refer to Table 7-12. The equilibrium market price for 10 piano lessons is $300. What is the total producer surplus in the market?