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

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Question 211

True/False

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For any given quantity, the price on a demand curve represents the marginal buyer's willingness to pay.

A) True
B) False

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Question 212

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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) B) and C)
F) All of the above

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Question 213

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Figure 7-13 -Refer to Figure 7-13. If the equilibrium price rises from $60 to $120, what is the additional producer surplus to initial producers in the market?

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 4 if the price is

Figure 7-25 -Refer to Figure 7-25. Suppose the government imposes a price ceiling of $16 in this market. If the buyers with the highest willingness to pay purchase the good, then total surplus will be

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?

Table 7-4 The numbers in Table 7-1 reveal the maximum willingness to pay for a ticket to a Chicago Cubs vs. St. Louis Cardinal's baseball game at Wrigley Field. -Refer to Table 7-4. If you have two (essentially) identical tickets that you sell to the group in an auction, what will be the selling price for each ticket?

Figure 7-27 -Refer to Figure 7-27. Sellers whose costs are greater than the equilibrium price are represented by segment

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

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?

Figure 7-19 -Refer to Figure 7-19. At the equilibrium price, total surplus is

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, what is the change in total consumer surplus in the market?

Figure 7-20 -Refer to Figure 7-20. Total surplus can be measured as the area

A demand curve reflects each of the following except the

Bob purchases a book for $6, and his consumer surplus is $2. How much is Bob willing to pay for the book?

Figure 7-23 -Refer to Figure 7-23. If the price were P1, producer surplus would be represented by the area

Table 7-11 The only four producers in a market have the following costs: -Refer to Table 7-11. If Evan, Selena, Angie, and Kris sell the good, and the resulting producer surplus is $700, then the price must have been

Caroline sharpens knives in her spare time for extra income. Buyers of her service are willing to pay $2.95 per knife for as many knives as Caroline is willing to sharpen. On a particular day, she is willing to sharpen the first knife for $2.00, the second knife for $2.25, the third knife for $2.75, and the fourth knife for $3.50. Assume Caroline is rational in deciding how many knives to sharpen. Her producer surplus is

According to many economists, government restrictions on ticket scalping do all of the following except

If the demand for light bulbs increases, producer surplus in the market for light bulbs