Moody ch7 econ 110 exam 2

Jen values her time at consumer surplus is $20 larger than producer surplus.$

60 an hour. She spends 2 hours giving Colleen a massage. Colleen was willing to pay as much as $300 for the massage, but they negotiate a price of $200.

value of everything she must give up to produce a good.

A seller's opportunity cost measures the

consumer surplus plus producer surplus.

An efficient allocation of resources maximizes

the property of a resource allocation of maximizing the total surplus received by all members of society

Efficiency

$50

Kristi sells purses. Her cost is $35 per purse. On a certain day, she sells 12 purses, and her producer surplus for that day amounts to $180. Kristi sold each purse for

the amount a seller is paid minus the cost of production

Producer surplus is the

positive but less than the marginal seller's cost.

Producing a quantity larger than the equilibrium of supply and demand is inefficient because the marginal buyer's willingness to pay is

It increases.

Suppose the demand for peanuts increases. What will happen to producer surplus in the market for peanuts?

It falls by less than $100.

The demand curve for cookies is downward sloping. When the price of cookies is $2, the quantity demanded is 100. If the price rises to $3, what happens to consumer surplus?

highest, lowest

When a market is in equilibrium, the buyers are those with the ________ willingness to pay, and the sellers are those with the ________ costs.

Since sellers cannot set the price for their product, they must be willing to sell their product at any price.

Which of the following statements is not correct?

the imposition of a nonbinding price ceiling in the market

Which of the following will cause no change in producer surplus?

$10

You are offered a free ticket to see the Chicago Cubs play the Chicago White Sox at Wrigley Field. Assume the ticket has no resale value. Willie Nelson is performing on the same night, and his concert is your next-best alternative activity. Tickets to see Willie Nelson cost $40. On any given day, you would be willing to pay up to $50 to see and hear Willie Nelson perform. Assume there are no other costs of seeing either event. Based on this information, at a minimum, how much would you have to value seeing the Cubs play the White Sox to accept the ticket and go to the game?

the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it

consumer surplus

the value of everything a seller must give up to produce a good

cost

the property of distributing economic prosperity uniformly among the members of society

equality

in the presence of market failures such as market power or externalities

markets do not allocate resources efficiently

between $100 and $200

ohn has been working as a tutor for $300 a semester. When the university raises the price it pays tutors to $400, Jasmine enters the market and begins tutoring as well. How much does producer surplus rise as a result of this price increase?

the amount a seller is paid for a good minus the seller's cost of providing it

producer surplus

by finding the area below the price and above the supply curve

producer surplus found

maximizes the sum of consumer and producer surplus

the equilibrium of supply and demand

the study of how the allocation of resources affects economic well-being

welfare economics

the sum of consumer and producer surplus, which is said to be efficient

what maximizes the allocation of resources

the maximum amount that a buyer will pay for a good

willingness to pay

by finding the area below the demand curve and above the price

where to find consumer surplus