Honors Econ Chapter 4

Along a given supply curve, an increase in the price of a good will: A. increase producer surplus B. decrease producer surplus C. increase consumer surplus D. decrease producer surplus and increase consumer surplus

A

If the cost to download a song from the Internet onto an MP3 player falls from $0.99 to $0.50, then we would predict that producer surplus would_______ in the market for MP3 players. A. increase B. deacrease C. not change D. We cannot determine what producer surplus will do without information about consumer surplus

A

If the government imposes a price ceiling in the market for grapefruit, total surplus: A. will increase B. will decrease C. will not change D. may change, but we cannot determine the change without more information

B

If there is a decrease in demand, total surplus: A. will increase B. will decrease C. will remain the same D. may change, but we can't tell how

B

If there is a decrease in supply, total surplus: A. will increase B. will decrease C. will remain the same D. may change, but we can't tell how

B

The total producer surplus for a good can be calculated in all except for one of the following ways. Which is the exception? A. the sum of the individual producer surpluses for all sellers of the good B. the area below the supply curve for the good up to the quantity of the good sold C. the area above the supply curve and below the price at which the good is being sold D. the sum for all sellers of the good, of the difference between what each seller receives and the minimum amount he or she is willing to accept for selling the good

B

Vonda and Aleiyah are shopping together at the mall for new jeans. Vonda is willing to pay $90 and Aleiyah is willing to pay $50 for a pair of jeans. What is the gain in total consumer surplus when the price decreases from $59 to $40? A. $10 B. $29 C. $31 D. $60

B

Consumer surplus can be found by computing the area: A. above the supply curve and below the price B. under the supply curve and above the price C. under the demand curve and above the price D. under the demand curve and below the price

C

Consumer surplus for an individual buyer is equal to: A. the consumer's willingness to pay for the good, minus the marginal cost of producing the good B. the price of the good, minus the marginal cost of producing the good C. the consumer's willingness to pay for the good, minus the price of the good D. the marginal cost of the good, minus the consumer's willingness to pay for the good

C

The total consumer surplus for Good X can be calculated in all except one fo the following ways. Which is the exception? A. the sum of the individual consumer surpluses for all buyers of X B. the area below the demand curve for X and above the price X C. the area bounded by the demand curve for X and the two axes D. the sum, for all buyers of X, of the difference between what each buyer is willing to pay for X an the amount actually paid

C

Vonda and Aleiyah are shopping together at the mall for new jeans. Vonda is willing to pay $90 and Aleiyah is willing to pay $50 for a pair of jeans. If the price of jeans is $59, how much total consumer surplus is achieved in this market? A. $0 B. $9 C. $31 D. $40

C

Consider the market for milkshakes. An increase in the consumer surplus may result from: A. an increase in the price of milkshakes B. a decrease in the supply of milkshakes C. a decrease in the demand for milkshakes D.an increase in the supply of milkshakes

D