ECON 102 - CHAPTER 4 QUIZ

Producer Minimum Acceptable Price Actual Price (Equilibrium Price) A - $6 $14 B - 7 14 C - 9 14 D - 11 14 E - 13 14 Refer to the provided table. What is the total producer surplus in the market for all producers for A,B,C,D and E?

$24

In the market for a particular pair of shoes, Geri is willing to pay $50 for a pair, while Jane is willing to pay for $55 for a pair. The actual price that each has to pay for a pair of these shoes is $40. What is the total amount of the I'm 2 minutes away! womens combined consumer surplus?

$25

Charlie is willing to pay $14 for a T-shirt that is priced at $11. If Charlie buys the T-shirt, then this consumer surplus is

$3

Producer Minimum Acceptable Price Actual Price (Equilibrium Price) A - $6 $13 B - 7 13 C - 9 13 D - 11 13 E - 13 13 Refer to the provided table. The surplus for Producer B is:

$6

Amanda buys a ruby for $240 for which she was willing to pay $340. the minimum acceptable price to the seller, Tony, was $190. Amanda experiences

A consumer surplus of $100, and Tony experiences a producer surplus if $50

Refer to the graph of a competitive market. if the output level is Q2, then there will be:

Allocative efficiency

Refer to the competitive diagram for product Z. assume that the current market demand and supply curves for Z are D2 and S2. If there are substantial external benefits associated with the production of Z, then:

An output greater than G would result in a more efficient allocation of resources

In the provided graph, the equilibrium point in the market is where the S and D curves intersect. At equilibrium, the producer surplus would be represented by the area:

B

Jennifer buys a piece of costume jewelry for $19, for which she was willing to pay $20. The minimum acceptable price to the seller, Nathan, was $11. Jennifer experiences a

Consumer surplus of $1, and nathan experiences a producer surplus or $8

A market for pollution rights can be expected to:

Provide potential polluters with a monetary incentive to reduce emissions

A negative externality or spillover cost occurs when

The total cost of producing a good exceeded the costs borne by the producer

Pigovian Taxes

are used to correct negative externalities.

Product reviews help to alleviate problems associated with

asymmetric information

Market failure is said to occur whenever:

competitive markets do not allocate resources in the most economically desirable way.

If there are external benefits associated with the consumption of a good or service:

the market demand curve will underestimate the true demand curve