Eco Ch 7

Refer to Table 7-3. If the market price of an orange is $1.20, total consumer surplus is _______

$1.40

Refer to Table 7-4. If the market price is $1,100, the combined total cost of all participating sellers is _______.

$2,250

Refer to Table 7-4. If the market price is $1,000, the producer surplus of all participating sellers is _______.

$750

Refer to Table 7-3. If the market price of an orange is $1.20, the total quantity of oranges demanded per day is _______.

3

Refer to Table 7-3. If the market price of an orange is $0.70, the total quantity of oranges demanded per day is _______.

7

Refer to Figure 7-10. At the equilibrium, total surplus is represented by the area _______.

A + B + C + D + E + F.

Refer to Figure 7-10. At the equilibrium, total consumer surplus is represented by the area _______.

A + B + C.

Refer to Figure 7-4. Which area represents producer surplus when the price is P2?

ACF

Refer to Figure 7-4. Which area represents the increase in producer surplus when the price rises from P1 to P2?

AFEB

Refer to Figure 7-4. Which area represents producer surplus when the price is P1?

BCE

Refer to Figure 7-6. When the price is P1, producer surplus is _______.

C

Refer to Table 7-4. If the market price is $775, who would be willing to supply the product?

Catherine and Jackson

In the absence of taxes and subsidies, total surplus in a market is equal to _______.

Consumer surplus + Producer surplus.

Refer to Figure 7-10. The efficient price-quantity combination is

P2 and Q2.

Refer to Figure 7-6. When the price falls from P2 to P1, producer surplus _______.

decreases by an amount equal to A + B.

Assuming all other factors that affect consumers' behavior remain unchanged, if the price of a good decreases, then the consumer surplus _______.

increases

Suppose Q units of a product or service are bought when the price is P per unit. Graphically, the net gain received by the sellers is represented by:

the area above the supply curve and under the price P up to the quantity Q.

Suppose Q units of a product or service are bought when the price is P per unit. Graphically, the net gain received by the buyers is represented by _______.

the area under the demand curve and above the price P up to the quantity Q.

The net gain that the buyer gets from a purchase is called _______.

the consumer surplus. It is the maximum amount that the buyer is willing to pay for the purchase minus the amount the buyer actually pays.

The "invisible hand" refers to _______.

the idea that the marketplace guides the self-interests of market participants into promoting general economic well-being.

An economic outcome is efficient if _______.

total surplus is maximized.