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

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Question 81

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Figure 7-9 -Refer to Figure 7-9.If the supply curve is S and the demand curve shifts from D to D',what is the increase in producer surplus due to new producers entering the market?

A) $625
B) $2,500
C) $3,125
D) $5,625

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

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Question 82

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Figure 7-10 -Refer to Figure 7-10.If the equilibrium price rises from $50 to $200,what is the additional producer surplus to initial producers?

A) $625
B) $3,750
C) $5,625
D) $10,000

E) A) and D)
F) A) and C)

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Question 83

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Table 7-2 This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. -Refer to Table 7-2.If the price of Vanilla Coke is $6.90,who will purchase the good?

Figure 7-20 -Refer to Figure 7-20.If 6 units of the good are produced and sold,then

Figure 7-17 -Refer to Figure 7-17.When the price is P1,area B+C represents

Figure 7-18 -Refer to Figure 7-18.Assume demand increases and as a result,equilibrium price increases to $22 and equilibrium quantity increases to 110.The increase in producer surplus to producers already in the market would be

Table 7-9 The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality. -Refer to Table 7-9.You wish to purchase 10 piano lessons for yourself and for your brother,so you take bids from each of the sellers.You will take lessons at the same time,so one teacher cannot provide lessons to both of you.You must pay the same price for both sets of lessons,and you will not accept a bid below a seller's cost because you are concerned that the seller will not provide all 10 lessons.What bid will you accept?

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

Welfare economics is the study of

Figure 7-12 -Refer to Figure 7-12.When the price is P2,producer surplus is

Inefficiency exists in an economy when a good is

If the government imposes a binding price floor in a market,then the consumer surplus in that market will increase.

The willingness to pay is the maximum amount that a buyer will pay for a good and measures how much the buyer values the good.

Joel has a 1966 Mustang,which he sells to Susie,an avid car collector.Susie is pleased since she paid $8,000 for the car but would have been willing to pay $11,000 for the car.Susie's consumer surplus is $2,000.

If the United States changed its laws to allow for the legal sale of a kidney,which of the following is least likely to occur?

David tunes pianos in his spare time for extra income.Buyers of his service are willing to pay $135 per tuning.One particular week,David is willing to tune the first piano for $115,the second piano for $125,the third piano for $140,and the fourth piano for $175.Assume David is rational in deciding how many pianos to tune.His producer surplus is

Figure 7-15 -Refer to Figure 7-15.If the government imposes a price floor of $60 in this market,then total surplus will be

Table 7-5 For each of three potential buyers of oranges,the table displays the willingness to pay for the first three oranges of the day.Assume Alex,Barb,and Carlos are the only three buyers of oranges,and only three oranges can be supplied per day. -Refer to Table 7-5.If the market price of an orange is $1.20,then consumer surplus amounts to

Figure 7-2 -Refer to Figure 7-2.When the price is P2,consumer surplus is

Producer surplus is