Chapter 7 Exam - Micro
Refer to Figure 7-19. At the equilibrium price, consumer surplus is
A - $100
Refer to Figure 7-10. Which area represents producer surplus when the price is P1?
A - BCG
Willingness to pay
A - measures the value that a buyer places on a good.
Cost is a measure of the
A - seller's willingness to sell.
Consumer surplus is
A - the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.
Efficiency is attained when
A - total surplus is maximized.
Refer to Figure 7-19. At the equilibrium price, producer surplus is
B - $150
Refer to Table 7-2. If the market price is $5.50, the consumer surplus is
B - $4.50
Allen tutors in his spare time for extra income. Buyers of his service are willing to pay $40 per hours for as many hours Allen is willing to tutor. On a particular day, he is willing to tutor the first hour for $10, the second hour for $28, and the fourth hour for $40. Assume Allen is rational in deciding how many hours to tutor. His producer surplus is
B - $64
Refer to Figure 7-10. Which area represents producer surplus when the price is P2?
B - ACH
Refer to Figure 7-21. Which area represents consumer surplus when the price is P1?
B - B
All else equal, what happens to consumer surplus if the price of a good increases?
B - Consumer surplus decreases.
Refer to Table 7-2. If the market price is $3.80,
B - Megan's consumer surplus is $1.70 and total consumer surplus for the five individuals is $9.80
Refer to Figure 7-19. At the equilibrium price, total surplus is
C - $250
Refer to Figure 7-19. If the government imposes a price ceiling of $55 in this market, then total surplus will be
C - $250
Janine would be willing to pay $50 to see Les Misarables, but she buys a ticket for only $30. Janine values the performance at
C - $50
Refer to Figure 7-21. When the price is P1, area B+C represents
C - Consumer surplus
Refer to Figure 7-10. Which area represents the increase in producer surplus when the price rises from P1 to P2 due to new producers entering the market.
C - DGH
A supply curve can be used to measure producer surplus because it reflects
C - sellers' cost
Economist typically measure efficiency using
C - total surplus.
Total surplus in a market is equal to
C - value to buyers - cost of sellers.
Chad is willing to pay $5.00 to get his first cup of morning latte. He buys a cup from a vendor selling latte for $3.75 per cup. Chad's consumer surplus is
D - $1.25
Refer to Figure 7-2. If the price of the good is $100, then consumer surplus amounts to
D - $125
Refer to Figure 7-2. If the price of the good is $80, then consumer surplus amounts to
D - $185
Refer to Figure 7-10. When the price rises from P1 to P2, which area represents the increase in producer surplus to existing producers?
D - ABGD
Refer to Figure 7-10. Which area represents the increase in producer surplus when the price rises from P1 to P2?
D - AHGB
Refer to Table 7-2. Which of the following is not true?
D - All of the above are correct
Refer to Table 7-2. If the price of Vanilla Coke is $6.90, who will purchase the good?
D - David and Laura
A demand curve reflects each of the following except the
D - ability of buyers to obtain the quantity they desire.
Consumer surplus is
D - all of the above are correct