Question 1

Deadweight loss results from too few or too many resources used in a given market.

Accepted Answer

A) True 
 B)False

Question 2

Deadweight loss is the net loss of:

Accepted Answer

A)  consumer surplus.
B)  producer surplus.
C)  disequilibrium surplus.
D)  both a and b.

Question 3

Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss 2 to P3, then: A) total surplus increases. B) deadweight loss decreases. C) overproduction increases. D) underproduction decreases." class="answers-bank-image d-inline" rel="preload" > As shown in Exhibit 3A-2, if the market price falls from P2 to P3, then:

Accepted Answer

A)  total surplus increases.
B)  deadweight loss decreases.
C)  overproduction increases.
D)  underproduction decreases.

Question 4

If Bill is willing to pay $10 for one good X, $8 for a second, and $6 for a third, and the market price is $5, then Max's consumer surplus is:

Accepted Answer

A)  $24.
B)  $18.
C)  $9.
D)  $6.

Question 5

Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss  As shown in Exhibit 3A-2, if the market is in equilibrium, then ____ represents producer surplus.

Accepted Answer

A)  FEH
B)  EGH
C)  DFEA

Question 6

Consumer surplus is the:

Accepted Answer

A)  number of consumers who are excluded from a market because of scarcity.
B)  amount of a good that consumers will buy at a price below the equilibrium price.
C)  amount consumers are willing to pay for a good minus the amount the consumers actually pay for it.
D)  amount consumers are willing to pay for a good minus the cost of producing the good.

Question 7

Suppose a consumer is willing to pay $20 for one good X, $10 for a second, and $5 for a third, and the market price is $4. The consumer surplus is:

Accepted Answer

A)  $16.
B)  $6.
C)  $1.
D)  $23.

Question 8

In an efficient market, deadweight loss is ____.

Accepted Answer

A)  maximum.
B)  minimum.
C)  constant.
D)  zero.

Question 9

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss  As shown in Exhibit 3A-1, if the market price falls from $3.00 to $2.00, then area ____ disappears.

Accepted Answer

A)  ABEFD
B)  ABEC
C)  CEFD
D)  BEF

Question 10

Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss 1, the result is: A) deadweight loss. B) inefficiency. C) underproduction. D) all of the above are true. E) none of the above are true." class="answers-bank-image d-inline" rel="preload" > As shown in Exhibit 3A-2, if the quantity supplied of good X per year is Q1, the result is:

Accepted Answer

A)  deadweight loss.
B)  inefficiency.
C)  underproduction.
D)  all of the above are true.
E)  none of the above are true.

Question 11

Deadweight loss results from:

Accepted Answer

A)  equilibrium.
B)  underproduction.
C)  overproduction.
D)  none of the above are correct.
E)  Either b or c.

Question 12

Consumer surplus is the:

Accepted Answer

A)  amount by which the quantity supplied of a good exceeds the quantity demanded of a good.
B)  measure of consumes' willingness to buy a good plus the price of the good.
C)  measure of how much consumers value a good.
D)  amount consumers are willing to pay for a good minus the amount the consumers actually pays for it.

Question 13

At the equilibrium price, deadweight loss is minimized.

Accepted Answer

A) True 
 B)False

Question 14

Producer surplus measures the value between the actual selling price and the profit-maximization price.

Accepted Answer

A) True 
 B)False

Question 15

A drought destroys much of the grape crop. As a result, consumer surplus in the market for wine:

Accepted Answer

A)  decreases.
B)  increases.
C)  remains unchanged.
D)  depends on the deadweight loss.

Question 16

Consumer surplus:

Accepted Answer

A)  does not exist in equilibrium.
B)  is illustrated by the area under the demand curve and above the market price.
C)  is illustrated by the area under the demand curve and below the market price.
D)  is illustrated by the area above the supply curve and under the demand curve.

Question 17

Deadweight loss results from a misallocation of resources.

Accepted Answer

A) True 
 B)False

Question 18

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss  As shown in Exhibit 3A-1, if the market price falls from $2.00 to $1.00, then:

Accepted Answer

A)  total surplus increases.
B)  deadweight loss increases.
C)  overproduction decreases.
D)  underproduction decreases.

Question 19

Total producer surplus is measured by the total area under the equilibrium price and below the supply curve.

Accepted Answer

A) True 
 B)False

Question 20

Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss 2 to P3, then: A) consumer surplus increases. B) producer surplus increases. C) deadweight loss increases. D) all of the above are true. E) none of the above are true." class="answers-bank-image d-inline" rel="preload" > As shown in Exhibit 3A-2, if the market price falls from P2 to P3, then:

Accepted Answer

A)  consumer surplus increases.
B)  producer surplus increases.
C)  deadweight loss increases.
D)  all of the above are true.
E)  none of the above are true.

Exam 22: Consumer Surplus, Producer Surplus, and Market Efficiency

Consumer surplus is the:

Correct AnswerverifiedShow Answer

Deadweight loss results from too few or too many resources used in a given market.

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Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss As shown in Exhibit 3A-2, if the market is in equilibrium, then ____ represents producer surplus.

Correct AnswerverifiedShow Answer

Total producer surplus is measured by the total area under the equilibrium price and below the supply curve.

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Deadweight loss results from:

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Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss As shown in Exhibit 3A-2, if the market price falls from P2 to P3, then:

Correct AnswerverifiedShow Answer

Deadweight loss results from a misallocation of resources.

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At the equilibrium price, deadweight loss is minimized.

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In an efficient market, deadweight loss is ____.

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Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss As shown in Exhibit 3A-1, if the market price falls from $2.00 to $1.00, then:

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Producer surplus measures the value between the actual selling price and the profit-maximization price.

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Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss As shown in Exhibit 3A-2, if the market price falls from P2 to P3, then:

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Consumer surplus:

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If Bill is willing to pay $10 for one good X, $8 for a second, and $6 for a third, and the market price is $5, then Max's consumer surplus is:

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Suppose a consumer is willing to pay $20 for one good X, $10 for a second, and $5 for a third, and the market price is $4. The consumer surplus is:

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Deadweight loss is the net loss of:

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Consumer surplus is the:

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Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss As shown in Exhibit 3A-2, if the quantity supplied of good X per year is Q1, the result is:

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A drought destroys much of the grape crop. As a result, consumer surplus in the market for wine:

Correct AnswerverifiedShow Answer

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss As shown in Exhibit 3A-1, if the market price falls from $3.00 to $2.00, then area ____ disappears.

Correct AnswerverifiedShow Answer

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Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss As shown in Exhibit 3A-2, if the market price falls from P₂ to P₃, then:

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Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss As shown in Exhibit 3A-2, if the market price falls from P₂ to P₃, then:

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Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss As shown in Exhibit 3A-2, if the quantity supplied of good X per year is Q₁, the result is:

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