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

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Question 211

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Table 7-7 -Refer to Table 7-7. You have four essentially identical extra tickets 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 offer to sell the tickets for $325. How many tickets do you sell, and what is the total consumer surplus in the market?

A) one ticket; $175
B) two tickets; $225
C) three tickets; $225
D) three tickets; $275

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Question 212

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Figure 7-17 -Refer to Figure 7-17. Suppose the market starts out in equilibrium with demand curve D and supply curve S. Next, suppose demand shifts left so as to decrease the quantity demanded by 20 units at every price. What is the change in producer surplus as a result of this demand shift?

A) $80
B) $160
C) $240
D) $320

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Question 213

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

Figure 7-15 -Refer to Figure 7-15. When the price rises from P1 to P2, what area represents the increase in producer surplus?

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?

Let P represent price; let QS represent quantity supplied; and assume the equation of the supply curve is If 80 units of the good are produced and sold, then producer surplus amounts to $1,200.

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 producer surplus change, assuming the producers with the lowest cost were the ones supplying the market when the price floor was in place?

Table 7-1 -Refer to Table 7-1. If the price of the product is $110, then who would be willing to purchase the product?

Pat bought a new car for $15,500 but was willing to pay $24,000. The consumer surplus is

Figure 7-11 -Refer to Figure 7-11. If the supply curve is S and the demand curve shifts from D to D', what is the increase in producer surplus to existing producers?

Table 7-20 -Refer to Table 7-20. How much is total surplus at the equilibrium price in this market?

Figure 7-8 -Refer to Figure 7-8. At the equilibrium price, consumer surplus is

Table 7-1 -Refer to Table 7-1. If the market price is $105,

Figure 7-22 -Refer to Figure 7-22. At the equilibrium price, consumer surplus is

The decisions of buyers and sellers that affect people who are not participants in the market create

Table 7-11 The following table represents the costs of five possible sellers. -Refer to Table 7-11. If the price is $1,l50, who would be willing to supply the product?

When policymakers are considering a particular action, they can use consumer surplus as an)

Figure 7-10 -Refer to Figure 7-10. Which area represents the increase in producer surplus when the price rises from P1 to P2 due to new producers entering the market?

Welfare economics explains which of the following in the market for televisions?

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