Question 1

A simultaneous decrease in both the demand for MP3 players and the supply of MP3 players would imply that

Accepted Answer

A)   both the value of MP3 players to consumers and the cost of producing MP3 players has increased.
B)   both the value of MP3 players to consumers and the cost of producing MP3 players has decreased.
C)   the value of MP3 players to consumers has decreased, and the cost of producing MP3 players has increased.
D)   the value of MP3 players to consumers has increased, and the cost of producing MP3 players has decreased.E) None of the above
F) C) and D)

Question 2

Figure 7-7
 
-Refer to Figure 7-7.If the price of the good is $14,then producer surplus is

Accepted Answer

A)   $17.
B)   $22.
C)   $25.
D)   $28.E) A) and B)
F) A) and C)

Question 3

The consumption of water by local residents that may include pesticide runoff from local farmers' fields is an example of

Accepted Answer

A)   market equilibrium.
B)   market power.
C)   externalities.
D)   laissez-faire.E) A) and D)
F) B) and C)

Question 4

Figure 7-20
 
-Refer to Figure 7-20.At equilibrium,producer surplus is measured by the area

Accepted Answer

A)   ACG.
B)   AFG.
C)   KBG.
D)   CFG.E) A) and B)
F) C) and D)

Question 5

Figure 7-13
 
-Refer to Figure 7-13.Sellers will be unwilling to sell more than

Accepted Answer

A)   1 unit of the good if its price is below $200.
B)   2 units of the good if its price is below $450.
C)   3 units of the good if its price is below $700.
D)   All of the above are correct.E) B) and D)
F) A) and B)

Question 6

Consumer surplus is the

Accepted Answer

A)   amount of a good consumers get without paying anything.
B)   amount a consumer pays minus the amount the consumer is willing to pay.
C)   amount a consumer is willing to pay minus the amount the consumer actually pays.
D)   value of a good to a consumer.E) A) and B)
F) None of the above

Question 7

Welfare economics is the study of

Accepted Answer

A)   the well-being of less fortunate people.
B)   welfare programs in the United States.
C)   how the allocation of resources affects economic well-being.
D)   the effect of income redistribution on work effort.E) A) and C)
F) All of the above

Question 8

Table 7-7
The following table represents the costs of five possible sellers.
 
-Refer to Table 7-7.If the price is $775,who would be willing to supply the product?

Accepted Answer

A)   Abby and Bobby
B)   Abby, Bobby, and Carlos
C)   Carlos, Dianne, and Evalina
D)   Dianne and EvalinaE) B) and C)
F) A) and D)

Question 9

Efficiency is related to the size of the economic pie,whereas equality is related to how the pie gets sliced and distributed.

Accepted Answer

A) True 
 B)False

Question 10

Total surplus in a market is equal to

Accepted Answer

A)   value to buyers - amount paid by buyers.
B)   amount received by sellers - costs of sellers.
C)   value to buyers - costs of sellers.
D)   amount received by sellers - amount paid by buyers.E) A) and B)
F) A) and C)

Question 11

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

Accepted Answer

A)   increases.
B)   decreases.
C)   remains the same.
D)   may increase, decrease, or remain the same.E) A) and B)
F) All of the above

Question 12

Table 7-6
 
-Refer to Table 7-6.You are selling 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.Which of the following graphs represents the market demand curve?

Accepted Answer

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

Question 13

If the government removes a binding price ceiling in a market,then the producer surplus in that market will increase.

Accepted Answer

A) True 
 B)False

Question 14

Figure 7-12
 
-Refer to Figure 7-12.When the price falls from P2 to P1,producer surplus

Accepted Answer

A)   decreases by an amount equal to C.
B)   decreases by an amount equal to A+B.
C)   decreases by an amount equal to A+C.
D)   increases by an amount equal to A+BE) A) and B)
F) C) and D)

Question 15

A drought in California destroys many red grapes.As a result of the drought,the consumer surplus in the market for red grapes

Accepted Answer

A)   increases, and the consumer surplus in the market for red wine increases.
B)   increases, and the consumer surplus in the market for red wine decreases.
C)   decreases, and the consumer surplus in the market for red wine increases.
D)   decreases, and the consumer surplus in the market for red wine decreases.E) A) and B)
F) C) and D)

Question 16

Figure 7-13
 
-Refer to Figure 7-13.If the price of the good is $600,then

Accepted Answer

A)   consumer surplus is $800.
B)   consumer surplus is $900.
C)   producer surplus is $900.
D)   producer surplus is $1,000.E) None of the above
F) A) and B)

Question 17

Which of the following equations is valid?

Accepted Answer

A)   Consumer surplus = Total surplus - Cost to sellers
B)   Producer surplus = Total surplus - Consumer surplus
C)   Total surplus = Value to buyers - Amount paid by buyers
D)   Total surplus = Amount received by sellers - Cost to sellersE) A) and B)
F) None of the above

Question 18

Bill created a new software program he is willing to sell for $200.He sells his first copy and enjoys a producer surplus of $150.What is the price paid for the software?

Accepted Answer

A)   $50.
B)   $150.
C)   $200.
D)   $350.E) B) and C)
F) A) and D)

Question 19

Economists tend to see ticket scalping as

Accepted Answer

A)   a way for a few to profit without producing anything of value.
B)   an inequitable interference in the orderly process of ticket distribution.
C)   a way of increasing the efficiency of ticket distribution.
D)   an unproductive activity which should be made illegal everywhere.E) A) and C)
F) A) and B)

Question 20

Total surplus is

Accepted Answer

A)   the total cost to sellers of providing the good minus the total value of the good to buyers.
B)   the total value of the good to buyers minus the cost to sellers of providing the good.
C)   the difference between consumer surplus and sellers' cost.
D)   always smaller than producer surplus.E) A) and C)
F) A) and B)

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

The consumption of water by local residents that may include pesticide runoff from local farmers' fields is an example of

Correct Answer
verified

Table 7-7 The following table represents the costs of five possible sellers. -Refer to Table 7-7.If the price is $775,who would be willing to supply the product?

Correct Answer
verified

Consumer surplus is the

Correct Answer
verified

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

Correct Answer
verified

Welfare economics is the study of

Correct Answer
verified

Efficiency is related to the size of the economic pie,whereas equality is related to how the pie gets sliced and distributed.

Correct Answer
verified

Figure 7-7 -Refer to Figure 7-7.If the price of the good is $14,then producer surplus is

Correct Answer
verified

Total surplus in a market is equal to

Correct Answer
verified

Economists tend to see ticket scalping as

Correct Answer
verified

Correct Answer
verified

A simultaneous decrease in both the demand for MP3 players and the supply of MP3 players would imply that

Correct Answer
verified

Figure 7-20 -Refer to Figure 7-20.At equilibrium,producer surplus is measured by the area

Correct Answer
verified

If the government removes a binding price ceiling in a market,then the producer surplus in that market will increase.

Correct Answer
verified

Figure 7-13 -Refer to Figure 7-13.If the price of the good is $600,then

Correct Answer
verified

Figure 7-13 -Refer to Figure 7-13.Sellers will be unwilling to sell more than

Correct Answer
verified

Figure 7-12 -Refer to Figure 7-12.When the price falls from P2 to P1,producer surplus

Correct Answer
verified

A drought in California destroys many red grapes.As a result of the drought,the consumer surplus in the market for red grapes

Correct Answer
verified

Total surplus is

Correct Answer
verified

Bill created a new software program he is willing to sell for $200.He sells his first copy and enjoys a producer surplus of $150.What is the price paid for the software?

Correct Answer
verified

Which of the following equations is valid?

Correct Answer
verified

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

The consumption of water by local residents that may include pesticide runoff from local farmers' fields is an example of

Correct AnswerverifiedShow Answer

Table 7-7 The following table represents the costs of five possible sellers. -Refer to Table 7-7.If the price is $775,who would be willing to supply the product?

Correct AnswerverifiedShow Answer

Consumer surplus is the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Welfare economics is the study of

Correct AnswerverifiedShow Answer

Efficiency is related to the size of the economic pie,whereas equality is related to how the pie gets sliced and distributed.

Correct AnswerverifiedShow Answer

Figure 7-7 -Refer to Figure 7-7.If the price of the good is $14,then producer surplus is

Correct AnswerverifiedShow Answer

Total surplus in a market is equal to

Correct AnswerverifiedShow Answer

Economists tend to see ticket scalping as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A simultaneous decrease in both the demand for MP3 players and the supply of MP3 players would imply that

Correct AnswerverifiedShow Answer

Figure 7-20 -Refer to Figure 7-20.At equilibrium,producer surplus is measured by the area

Correct AnswerverifiedShow Answer

If the government removes a binding price ceiling in a market,then the producer surplus in that market will increase.

Correct AnswerverifiedShow Answer

Figure 7-13 -Refer to Figure 7-13.If the price of the good is $600,then

Correct AnswerverifiedShow Answer

Figure 7-13 -Refer to Figure 7-13.Sellers will be unwilling to sell more than

Correct AnswerverifiedShow Answer

Figure 7-12 -Refer to Figure 7-12.When the price falls from P2 to P1,producer surplus

Correct AnswerverifiedShow Answer

A drought in California destroys many red grapes.As a result of the drought,the consumer surplus in the market for red grapes

Correct AnswerverifiedShow Answer

Total surplus is

Correct AnswerverifiedShow Answer

Bill created a new software program he is willing to sell for $200.He sells his first copy and enjoys a producer surplus of $150.What is the price paid for the software?

Correct AnswerverifiedShow Answer

Which of the following equations is valid?

Correct AnswerverifiedShow Answer

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