ECON 201 Chapter 7

Refer to Figure 7-12. If the equilibrium price is $200, what is the producer surplus?

$7,500

Refer to Figure 7-3. When the price is P2, consumer surplus is

A

Refer to Figure 7-19. At the equilibrium price, total surplus is

$250

The maximum price that a buyer will pay for a good is called

willingness to pay

Refer to Figure 7-3. When the price is P1, consumer surplus is

A+B+C

Refer to Figure 7-3. When the price rises from P1 to P2, which of the following statements is not true?

Buyers place a higher value on the good after the price increase.

Refer to Table 7-1. If the price of the product is $110, then who would be willing to purchase the product?

Calvin, Sam, and Andrew

Refer to Figure 7-3. When the price rises from P1 to P2, consumer surplus

decreases by an amount equal to B+C.

Welfare economics is the study of

how the allocation of resources affects economic well-being

Consumer surplus is

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

Producer surplus is

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

Refer to Figure 7-21. When the price is P1, area B+C represents

total surplus