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

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Question 61

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Suppose Brent, Callie, and Danielle each purchase a particular type of electric pencil sharpener at a price of $20. Brent's willingness to pay was $22, Callie's willingness to pay was $25, and Danielle's willingness to pay was $30. Which of the following statements is correct?

A) Had the price of the pencil sharpener been $24 rather than $20, only Danielle would have been a buyer.
B) Brent's consumer surplus is the smallest of the three individual consumer surpluses.
C) For the three individuals together, consumer surplus amounts to $60.
D) The fact that all three individuals paid $20 for the same type of pencil sharpener indicates that each one placed the same value on that pencil sharpener.

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

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Question 62

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Table 7-11 The following table represents the costs of five possible sellers. -Refer to Table 7-11. If the market price is $1,200, the producer surplus in the market is

A) $100.
B) $800.
C) $400.
D) $500.

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

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Question 63

Multiple Choice

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Table 7-16 The following table represents the costs of five possible sellers. Seller Cost $) -Refer to Table 7-16. Suppose each of the five sellers can supply at most one unit of the good. At which of the following prices would the market quantity supplied be exactly three units?

Figure 7-2 -Refer to Figure 7-2. If the price of the good is $100, then consumer surplus amounts to

Which of the following will cause an increase in consumer surplus?

When the demand for a good increases and the supply of the good remains unchanged, consumer surplus

Scenario 7-2 Suppose market demand and market supply are given by the equations: -Refer to Scenario 7-2. How much is total surplus at the equilibrium price in this market?

Table 7-17 -Refer to Table 7-17. Both the demand curve and the supply curve are straight lines. If the price is $4 but only 6 units are bought and sold, producer surplus will be

Table 7-15 -Refer to Table 7-15. You and your best friend want to hire a professional photographer to take pictures of your two families. The table shows the costs of the four potential sellers in the local photography market. You and your friend take bids from the sellers. Who offers the two winning bids, and what do they offer to charge for the photography sessions?

Alex is willing to pay $10, and Bella is willing to pay $8, for 1 pound of ribeye steak. When the price of ribeye steak increases from $9 to $11,

Scenario 7-2 Suppose market demand and market supply are given by the equations: -Refer to Scenario 7-2. How much is total consumer surplus at the equilibrium price in this market?

Figure 7-15 -Refer to Figure 7-15. When the price is P2, producer surplus is

Suppose you sell a kayak for $600, but you were willing to sell it for $450. The buyer was willing to pay $650. The total surplus is $200.

Figure 7-30 -Refer to Figure 7-30. If the market equilibrium price falls from $120 to $80, how much is the increase in consumer surplus to the consumers who were initially in the market at the $120 price?

Table 7-15 -Refer to Table 7-15. You want to hire a professional photographer to take pictures of your family. The table shows the costs of the four potential sellers in the local photography market. You hire Kevin for a price of $500. What is his producer surplus?

Table 7-14 The only four producers in a market have the following costs: -Refer to Table 7-14. If the sellers bid against each other for the right to sell the good to a single consumer, then the good will sell for

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

Let P represent price; let QS represent quantity supplied; and assume the equation of the supply curve is If 90 units of the good are produced and sold, then producer surplus amounts to $1,350.

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 price is $20, then consumer surplus in the market is

Figure 7-21 -Refer to Figure 7-21. Which area represents producer surplus when the price is P1?