7-1

Refer to Table 7-6. If the market price of an apple is $1.40, then consumer surplus amounts to A)$0.60 B)$1.20 C)$1.40 D)$3.40

A)$0.60

Michael values a stainless steel refrigerator for his new house at $3,500, but he succeeds in buying one for $3,000. Michael's consumer surplus is A)$500 B)$3,000 C)$3.500 D)$6,500

A)$500

Pat bought a new car for $15,500 but was willing to pay $24,000. The consumer surplus is A)$8,500 B)$15,500 C)$24,000 D)$39,500

A)$8,500

Refer to Figure 7-4. Which area represents consumer surplus at a price of P2? A)BDF B)AFG C)ABDG D)ABC

B)AFG

Chuck would be willing to pay $20 to attend a dog show, but he buys a ticket for $15. Chuck values the dog show at A)$5 B)$15 C)$20 D)$35

C)$20

Henry is willing to pay 45 cents, and Janine is willing to pay 55 cents, for 1 pound of bananas. When the price of bananas falls from 50 cents a pound to 40 cents a pound, A)Henry experiences an increase in consumer surplus, but Janine does not. B)Janine experiences an increase in consumer surplus, but Henry does not C)both Janine and Henry experience an increase in consumer surplus. D)neither Janine nor Henry experiences an increase in consumer surplus.

C)both Janine and Henry experience an increase in consumer surplus.

Refer to Figure 7-5. If the price of the good is $12, then consumer surplus is A)$9 B)$11 C)$13 D)$16

D)$16

Refer to Table 7-4. If you have a ticket that you sell to the group in an auction, who will buy the ticket? A)Dan B)David C)Ken D)Lisa

D)Lisa

Refer to Table 7-3. If the market price for the good is $20, who will purchase the good? A)Ming-la only B)Carlos and Quilana only C)Quilana and Wilbur only D)Quilana, Wilbur, and Ming-la only

D)Quilana, Wilbur, and Ming-la only

Refer to Table 7-5. Who experiences the largest loss of consumer surplus when the price of an orange increases from $0.70 to $1.40? A)Alisson B)Bob C)Charisse D)All three individuals experience the same loss of consumer surplus.

A)Alisson

Refer to Table 7-7. You have an extra ticket to the Midwest Regional Sweet 16 game in the men's NCAA basketball tournament. The table shows the willingness to pay of the four potential buyers in the market for a ticket to the game. You hold an auction to sell the ticket. Who makes the winning bid, and what does he offer to pay for the ticket? A)Michael; $501 B)Michael; more than $400 but less than or equal to $500 C)Earvin; $400 D)Earvin; more than $350 but less than or equal to $400

B)Michael; more than $400 but less than or equal to $500

Refer to Figure 7-8. If the government imposes a price ceiling of $80 in this market, then, assuming those with the highest willingness to pay purchase the good, consumer surplus will be A)$900 B)$1,200 C)$1,500 D)$1,600

C)$1,500

Refer to Figure 7-4. When the price falls from P1 to P2, which area represents the increase in consumer surplus to existing buyers? A)BDF B)AFG C)BCGD D)ABC

C)BCGD

Refer to Table 7-1. If the price of the product is $110, then who would be willing to purchase the product? A)Calvin B)Calvin and Sam C)Calvin, Sam, and Andrew D)Calvin, Sam, Andrew, and Lori

C)Calvin, Sam, and Andrew

If the price of oak lumber increases, what happens to consumer surplus in the market for oak cabinets? A)Consumer surplus increases. B)Consumer surplus decreases C)Consumer surplus will not change consumer surplus; only producer surplus changes D)Consumer surplus depends on what event led to the increase in the price of oak lumber.

B)Consumer surplus decreases