Chapter 7 Consumers , Producers , and Efficiency of Markets Practice Questions

Producer surplus directly measures

the well being of sellers

Consumer surplus is the area

Below the demand curve and above the price

Buyer WTP for Chipotle Burrito David $8.50 Laura $7.00 Megan $5.50 Malhory $4.00 Audrey $3.50 Which of the following is not true? A. At a price of $9.00, no buyer is willing to purchase the burrito B. At a price of $5.50, Megan is indifferent between buying the burrito and not buying one. C. At a price of $4.00, total consumer surplus in the market will be $9.00. D. All of the above are correct.

All of the above are correct

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

Buyer Willingness to Pay Carlos $15 Quentin $25 Wilbur $35 Michael $45 If the market price for the good is $20 , who will purchase the good

Quentin , Wilbur , and Michael only

Total Surplus

decreases when there is a tax