chapter 6

Ryan buys a new tractor for $118,000. He receives consumer surplus of $13,000 on his purchase. Ryan's willingness to pay is:

$131,000.

Kelly is willing to pay $5.20 for a gallon of gasoline. The price of gasoline at her local gas station is $3.80 per gallon. If she purchases ten gallons of gasoline, then Kelly's consumer surplus is

$14

Bob is willing to pay $400 for a new suit, but he is able to buy the same suit for $250 at Macy's. His consumer surplus is:

$150.

Jeff decides that he would pay as much as $3,000 for a new laptop computer. he buys the computer and realizes consumer surplus of $700. How much did Jeff pay for his computer?

$2,300

If Mike sells a shirt for $40, and his producer surplus from the sale is $8, his cost must have been:

$32.

Kate and Becca sell lemonade on the corner for $0.50 per cup. It costs them $0.10 to make each cup. On a certain day, their producer surplus is $20. How many cups did Kate and Becca sell?

50

All else equal, what happens to consumer surplus if the price of a good increases?

Consumer surplus decreases.

Suppose that there is an early freeze in California that reduces the size of the lemon crop. What happens to consumer surplus in the market for lemons?

Consumer surplus decreases.

Suppose that the demand for peaches decreases. What will happen to producer surplus in the market for peaches?

It decreases.

Suppose Iceland goes from being an isolated country to being an exporter of coats. As a result,

Suppose Iceland goes from being an isolated country to being an exporter of coats. As a result,

Which of the following statement is correct? A Consumer surplus refers to a situation in which there are more buyers than sellers in a market. B Producer surplus refers to a situation where there are more sellers than buyers in a market. C Total surplus is measured as the area below the demand curve and above the supply curve, up to the equilibrium quantity. D All of the above are correct,

Total surplus is measured as the area below the demand curve and above the supply curve, up to the equilibrium quantity.

Which of the following will cause an increase in consumer surplus? A an increase in the production cost of the good. B a technological improvement in the production of the goods. C a decrease in the number of sellers. D the imposition of a binding price floor in the market.

a technological improvement in the production of the goods.

If a consumer places a value of $20 on a particular good and if the price of the good is $25, then

consumer does not buy the good.

Total surplus in a market is equal to

consumer surplus + producer surplus.

On a graph, the area below a demand curve and above the price measures:

consumer surplus.

Oil is used to produce gasoline. If the price of oil increases, consumer surplus in the gasoline market:

decreases.

When a country allows trade and becomes an importer of a good,

domestic producers become worse off, and domestic consumers become better off.

Suppose that the world price of a television is $300. Before Paraguay allowed trade in televisions, the price os a TV there was $350. Once Paraguay began allowing trade in TVs with other countries, Paraguay began

importing TVs and the price of a TV in Paraguay decreased to $300.

If a market is allowed to move freely to its equilibrium price and quantity, then an increase in supply will

increase consumer surplus.

Total surplus in a market will increase when the government

removes a binding price ceiling from that market.

Producer surplus is

the amount a seller is paid minus the cost of production.

Producer surplus is:

the amount a seller is paid minus the cost of production.

Within a country, the domestic price of a product will equal the world price if:

the country allows for free trade.