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

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Question 151

Multiple Choice

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Which of the following events would increase producer surplus?

A) Sellers' costs stay the same and the price of the good increases.
B) Sellers' costs increase and the price of the good stays the same.
C) Sellers' costs increase and the price of the good decreases.
D) All of the above are correct.

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Question 152

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Figure 7-17 -Refer to Figure 7-17. Suppose the market starts out in equilibrium with demand curve D and supply curve S. Next, suppose demand shifts left so as to decrease the quantity demanded by 20 units at every price. What is the change in producer surplus as a result of this demand shift?

A) $80
B) $160
C) $240
D) $320

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Question 153

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The "invisible hand" refers to

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 there is only one unit of the good and if the buyers bid against each other for the right to purchase it, then the consumer surplus will be

Table 7-6 For each of three potential buyers of apples, the table displays the willingness to pay for the first three apples of the day. Assume Xavier, Yadier, and Zavi are the only three buyers of apples, and only three apples can be supplied per day. -Refer to Table 7-6. If the market price of an apple is $1.40, then consumer surplus amounts to

Figure 7-22 -Refer to Figure 7-22. At the equilibrium price, producer surplus is

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 Allison, Bob, and Charisse 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 $0.65, then consumer surplus amounts to

Figure 7-34 -Refer to Figure 7-34. Suppose there is initially a price ceiling set at $4 in this market. If the government removed the price ceiling, by how much would total producer surplus change?

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 market price for the good is $20, who will purchase the good?

Inefficiency exists in an economy when a good is

What happens to consumer surplus in the iPod market if iPods are normal goods and buyers of iPods experience an increase in income?

Figure 7-32 -Refer to Figure 7-32. If the government imposed a price ceiling at $20 in this market, how much are consumer surplus, producer surplus, and total surplus?

Consumer surplus measures the benefit to buyers of participating in a market.

Figure 7-1 -Refer to Figure 7-1. If the price of the good is $250, then consumer surplus amounts to

Table 7-17 -Refer to Table 7-17. The equilibrium price is

Total surplus is equal to

Figure 7-22 -Refer to Figure 7-22. If 110 units of the good are bought and sold, then

Table 7-2 This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. -Refer to Table 7-2. Which of the following is not true?

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. Which of the following graphs represents the market supply curve?

Even though participants in the economy are motivated by self-interest, the "invisible hand" of the marketplace guides this self-interest into promoting general economic well-being.