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

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Question 81

Multiple Choice

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

A) market power.
B) externalities.
C) profiteering.
D) market equilibrium.

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

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Question 82

Multiple Choice

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Figure 7-9 -Refer to Figure 7-9. If the price of the good is $9.50, then producer surplus is

A) $3.00.
B) $6.50.
C) $10.50.
D) $8.50.

E) A) and C)
F) None of the above

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Question 83

Multiple Choice

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Figure 7-7 -Refer to Figure 7-7. What is the consumer surplus if the price is $100?

Table 7-16 -Refer to Table 7-16. Both the demand curve and the supply curve are straight lines. At equilibrium, producer surplus is

The Surgeon General announces that eating apples promotes healthy teeth. As a result, the equilibrium price of apples

Figure 7-18 -Refer to Figure 7-18. Total surplus amounts to $500 if consumer surplus amounts to

Tom tunes pianos in his spare time for extra income. Buyers of his service are willing to pay $155 per tuning. One particular week, Tom is willing to tune the first piano for $120, the second piano for $125, the third piano for $140, and the fourth piano for $160. Assume Tom is rational in deciding how many pianos to tune. His producer surplus is

Figure 7-3 -Refer to Figure 7-3. When the price is P1, consumer surplus is

Total surplus is represented by the area

Figure 7-16 -Refer to Figure 7-16. Suppose the price of the good is $450. Then, on the first unit of the good that is sold, producer surplus is

Table 7-18 The following table shows the cost of producing a good for the only four producers in a market. -Refer to Table 7-18. If the market equilibrium price is $28, what is total producer surplus in the market?

Table 7-15 The following table represents the costs of five possible sellers. Seller Cost ($) Quentin 10 Ruby 30 Sandra 60 Thomas 100 Ursula 150 -Refer to Table 7-15. If each producer has one unit available for sale, and if the market equilibrium price is $70, how much is the combined total cost of all participating sellers in the market?

Table 7-10 The following table represents the costs of five possible sellers. Seller Cost Abby $1,600 Bobby $1,300 Dianne $1,100 Evaline $900 Carlos $800 -Refer to Table 7-10. If the market price is $1,200, the producer surplus in the market is

Which of the following statements is not correct about a market in equilibrium?

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

Figure 7-5 -Refer to Figure 7-5. If the price of the good is $12, then consumer surplus is

Scenario 7-1 Suppose market demand is given by the equation -Refer to Scenario 7-1. If the market equilibrium price rises from $10 to $15, what is the change in total consumer surplus in the market?

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

Wendy is willing to pay $50 for a concert ticket and Bruce would like to receive $25. If the market price is $40 for this transaction, then the total surplus would be $15.

Celine buys a new MP3 player for $90. She receives consumer surplus of $15 on her purchase if her willingness to pay is