Chapter 7: Macro-econ
The maximum price that a buyer will pay for a good is called
willingness to pay
Refer to Figure 7-12. If the equilibrium price rises from $200 to $350, what is the producer surplus to new producers?
$7,500
Refer to Figure 7-9. If the price of the good is $9.50, then producer surplus is
$8.50
Consumer surplus is equal to the
Value to buyers - Amount paid by buyers
Which of the following will cause an increase in consumer surplus?
a technological improvement in the production of the good
Refer to Figure 7-28. At the quantity Q3,
the marginal value to buyers is less than the marginal cost to sellers.
Refer to Table 7-11. If the sellers bid against each other for the right to sell the good to a consumer, then the producer surplus will be
$50 or slightly less
Refer to Figure 7-25. Suppose the government imposes a price ceiling of $16 in this market. If the buyers with the highest willingness to pay purchase the good, then total surplus will be
$1,024
Refer to Figure 7-25. Suppose the government imposes a price floor of $28 in this market. If the sellers with the lowest cost are the ones who sell the good and the government does not purchase any excess units produced, then total surplus will be
$1,120.
Refer to Table 7-11. If the sellers bid against each other for the right to sell the good to a consumer, then the good will sell for
$100 or slightly less
Refer to Figure 7-9. If producer surplus is $19, then the price of the good is
$13.50
Kelly is willing to pay $5.20 for a gallon of gasoline. The price of gasoline at her local gas station is $3.80. If she purchases ten gallons of gasoline, then Kelly's consumer surplus is
$14
Refer to Table 7-1. If price of the product is $135, then the total consumer surplus is
$15
Refer to Figure 7-12. If the equilibrium price rises from $200 to $350, what is the additional producer surplus to initial producers?
$15,000
Refer to Figure 7-9. If the price of the good is $14, then producer surplus is
$20.50
Refer to Table 7-11. If Evan, Selena, and Angie sell the good, and the resulting producer surplus is $300, then the price must have been
$200
Refer to Figure 7-12. If the equilibrium price is $350, what is the producer surplus?
$30,000
Refer to Table 7-11. If Evan, Selena, Angie, and Kris sell the good, and the resulting producer surplus is $700, then the price must have been
$300
Refer to Table 7-1. If the price of the product is $122, then the total consumer surplus is
$41
Refer to Figure 7-12. If the equilibrium price is $200, what is the producer surplus?
$7,500
Total surplus
All of the above are correct. (-is the value to buyers-cost to sellers -is the sum of consumer and producer surplus -can be used to measure a markets
Refer to Table 7-1. If the price of the product is $110, then who would be willing to purchase the product?
Calvin, Sam, and Andrew
Total surplus in a market will increase when the government
Neither a nor b is correct
Market power refers to the
ability of market participants to influence price
Producer surplus measures the
benefits to sellers of participating in a market.
Total surplus measures the
buyers' willingness to pay less the sellers' costs
If a consumer places a value of $20 on a particular good and if the price of the good is $25, then the
consumer does not purchase the good.
Refer to Figure 7-28. At the quantity Q2, the marginal value to buyers
is P2, and the marginal cost to sellers is P3
Market power and externalities are examples of
market failure.
A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it
maximizes the combined welfare of buyers and sellers.
Consumer surplus
measures the benefit buyers receive from participating in a market
Total surplus is equal to
value to buyers - cost to sellers.
The study of how the allocation of resources affects economic well-being is called
welfare economics
Externalities are
side effects passed on to a party other than the buyers and sellers in the market
A seller's willingness to sell is
All of the above are correct
Refer to Table 7-1. If the price of the product is $130, then who would be willing to purchase the product?
Calvin and Sam
Refer to Table 7-1. If the market price is $105,
Sam's consumer surplus is $30 and total consumer surplus is $90.
If a consumer places a value of $15 on a particular good and if the price of the good is $17, then the
consumer does not purchase the good
Total surplus is
the total value of the good to buyers minus the cost to sellers of providing the good
Refer to Figure 7-25. At the equilibrium price, total surplus is
$1,152
Refer to Table 7-1. If the price of the product is $90, then who would be willing to purchase the product?
Calvin, Sam, Andrew, and Lori
When the supply of a good decreases and the demand for the good remains unchanged, consumer surplus
decreases
Consumer surplus
is measured using the demand curve for a product
A consumer's willingness to pay directly measures
how much a buyer values a good
A seller's opportunity cost measures the
value of everything she must give up to produce a good
