Question 1

Table 7-1 
-Refer to Table 7-1. If the price of the product is $130, then who would be willing to purchase the product?

Accepted Answer

A)  Calvin
B)  Calvin and Sam
C)  Calvin, Sam, and Andrew
D)  Calvin, Sam, Andrew, and Lori

Question 2

Table 7-13
The only four producers in a market have the following costs:
Seller
Cost
Abbey
$30
Bev
$40
Carl
$55
Dale
$65
-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

Accepted Answer

A)  $40.
B)  $50.
C)  $60.
D)  $70.

Question 3

Figure 7-24 
-Refer to Figure 7-24. At equilibrium, producer surplus is

Accepted Answer

A)  $36.
B)  $72.
C)  $54.
D)  $18.

Question 4

Total surplus is equal to

Accepted Answer

A)  value to buyers - profit to sellers.
B)  value to buyers - cost to sellers.
C)  consumer surplus x producer surplus.
D)  (consumer surplus + producer surplus)  x equilibrium quantity.

Question 5

Bob purchases a book, and his consumer surplus is $3. If Bob is willing to pay $8 for the book, then the price of the book must be

Accepted Answer

A)  $3.
B)  $8.
C)  $5.
D)  $11.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Figure 7-15 
-Refer to Figure 7-15. Area A represents

Accepted Answer

A)  producer surplus to new producers entering the market as the result of an increase in price from P1 to P2.
B)  the increase in consumer surplus that results from an upward-sloping supply curve.
C)  the increase in total surplus when sellers are willing and able to increase supply from Q1 to Q2.
D)  the increase in producer surplus to those producers already in the market when the price increases from P1 to P2.

Question 8

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 only

Question 9

The lower the price, the lower the producer surplus, all else equal.

Accepted Answer

A) True 
 B)False

Question 10

Figure 7-33 
-Refer to Figure 7-33. How much is total consumer surplus in this market at the equilibrium price?

Accepted Answer

Total consumer surpl...

Question 11

Figure 7-2 
-Refer to Figure 7-2. If the price of the good is $80, then consumer surplus amounts to

Accepted Answer

A)  $110.
B)  $135.
C)  $160.
D)  $185.

Question 12

Figure 7-24 
-Refer to Figure 7-24. At equilibrium, total surplus is

Accepted Answer

A)  $36.
B)  $54.
C)  $18.
D)  $108.

Question 13

Figure 7-3 
-Refer to Figure 7-3. Area C represents the

Accepted Answer

A)  decrease in consumer surplus that results from a downward-sloping demand curve.
B)  consumer surplus to new consumers who enter the market when the price falls from P2 to P1.
C)  increase in producer surplus when quantity sold increases from Q2 to Q1.
D)  decrease in consumer surplus to each consumer in the market when the price increases from P1 to P2.

Question 14

Which of the following statements is correct?

Accepted Answer

A)  Buyers always want to pay less and sellers always want to be paid more.
B)  Buyers always want to pay less and sellers always want to be paid less.
C)  Buyers always want to pay more and sellers always want to be paid more.
D)  Buyers always want to pay more and sellers always want to be paid less.

Question 15

Figure 7-26 
-Refer to Figure 7-26. At the equilibrium price, producer surplus is

Accepted Answer

A)  $600.
B)  $900.
C)  $1,200.
D)  $1,800.

Question 16

Producer surplus is

Accepted Answer

A)  represented on a graph by the area below the demand curve and above the supply curve.
B)  the amount a seller is paid minus the cost of production.
C)  also referred to as excess supply.
D)  All of the above are correct.

Question 17

Table 7-19 
-Refer to Table 7-19. How much is total surplus at the equilibrium price in this market?

Accepted Answer

Total surp...

Question 18

Figure 7-17 
-Refer to Figure 7-17. If the demand curve is D and the supply curve shifts left from S to S', what is the change in producer surplus when comparing the new equilibrium with the original equilibrium?

Accepted Answer

A)  Producer surplus increases by $225.
B)  Producer surplus increases by $675.
C)  Producer surplus decreases by $225.
D)  Producer surplus decreases by $675.

Question 19

Table 7-19 
-Refer to Table 7-19. How much is total consumer surplus at the equilibrium price in this market?

Accepted Answer

Total consumer surpl...

Question 20

Figure 7-24 
-Refer to Figure 7-24. At equilibrium, consumer surplus is measured by the area

Accepted Answer

A)  AHG.
B)  AFB.
C)  ABD.
D)  BDF.

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

Total surplus is equal to

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Figure 7-33 -Refer to Figure 7-33. How much is total consumer surplus in this market at the equilibrium price?

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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 7-15 -Refer to Figure 7-15. Area A represents

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Figure 7-24 -Refer to Figure 7-24. At equilibrium, producer surplus is

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The lower the price, the lower the producer surplus, all else equal.

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Figure 7-17 -Refer to Figure 7-17. If the demand curve is D and the supply curve shifts left from S to S', what is the change in producer surplus when comparing the new equilibrium with the original equilibrium?

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Producer surplus is

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Table 7-19 -Refer to Table 7-19. How much is total surplus at the equilibrium price in this market?

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Table 7-1 -Refer to Table 7-1. If the price of the product is $130, then who would be willing to purchase the product?

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Bob purchases a book, and his consumer surplus is $3. If Bob is willing to pay $8 for the book, then the price of the book must be

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Table 7-13 The only four producers in a market have the following costs: Seller Cost Abbey $30 Bev $40 Carl $55 Dale $65 -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

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

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Table 7-19 -Refer to Table 7-19. How much is total consumer surplus at the equilibrium price in this market?

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Figure 7-24 -Refer to Figure 7-24. At equilibrium, consumer surplus is measured by the area

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Figure 7-24 -Refer to Figure 7-24. At equilibrium, total surplus is

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Figure 7-2 -Refer to Figure 7-2. If the price of the good is $80, then consumer surplus amounts to

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Figure 7-3 -Refer to Figure 7-3. Area C represents the

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Figure 7-26 -Refer to Figure 7-26. At the equilibrium price, producer surplus is

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Which of the following statements is correct?

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