ECON 202 Module 6 quizzes

Arthur buys a new cell phone for $150. He receives consumer surplus of $150 from the purchase. How much does Arthur value his cell phone?

300

If the quantity of fishing poles demanded is represented by the equation QD = 60 - P then the corresponding price of fishing poles is represented by the equation... P = 60 - QD. P = QD + 60. P = -60 + QD. P = 0.6QD + 10.

A

The difference between the ________ and the ________ from the sale of a product is called producer surplus. lowest price a firm would have been willing to accept; price it actually receives cost to produce a product; price a firm actually receives highest price a firm wold have been willing to accept; lowest price it was willing to accept cost to produce a product; profit received

A

________ is maximized in a competitive market when marginal benefit equals marginal cost. Economic surplus Selling price Deadweight loss Marginal profit

A

If the price of hairspray is represented by equation P = 10 - 0.2 QD, then the corresponding quantity of hairspray demanded is represented by the equation QD = -10 + 0.2P. QD = 50 -5P. QD = 5P - 2. QD = 0.5P + 2.

B

In a competitive market equilibrium... consumers and producers benefit equally. the marginal benefit equals the marginal cost of the last unit sold. marginal benefit and marginal cost are maximized. total consumer surplus equals total producer surplus.

B

Marginal cost is... the total cost of producing one unit of a good or service. the additional cost to a firm of producing one more unit of a good or service. the average cost of producing a good or service. the difference between the lowest price a firm would have been willing to accept and the price it actually receives.

B

The area ________ the market supply curve and ________ the market price is equal to the total amount of producer surplus in a market. below; above above; below above; above below; below

B

Which of the following statements is true? When a market is in equilibrium consumer surplus equals producer surplus. Consumer surplus measures the net benefit from participating in a market. Consumer surplus measures the total benefit from participating in a market. Producer surplus measures the total benefit received by producers from participating in a market.

B

A demand curve shows... the relationship between the price of a product and the demand for the product. the willingness of consumers to substitute one product for another product. the willingness of consumers to buy a product at different prices. the relationship between the price of a product and the total benefit consumers receive from the product.

C

Economic efficiency is defined as a market outcome in which the marginal benefit to consumers of the last unit produced is equal to the marginal cost of production, and in which... the sum of consumer surplus and producer surplus is minimized. economic surplus is minimized. the sum of consumer surplus and producer surplus is at a maximum. the sum of the benefits to firms is equal to the sum of the benefits to consumers.

C

Economic efficiency is defined as a market outcome in which the marginal benefit to consumers of the last unit produced is equal to the marginal cost of production, and in which... the sum of consumer surplus and producer surplus is minimized. the sum of the benefits to firms is equal to the sum of the benefits to consumers. the sum of consumer surplus and producer surplus is at a maximum. economic surplus is minimized.

C

If, in a competitive market, marginal benefit is less than marginal cost... the net benefit to consumers from participating in the market is less than the net benefit to producers. the quantity sold is less than the equilibrium quantity. the quantity sold is greater than the equilibrium quantity. the government must force producers to raise prices in order to achieve economic efficiency.

C

In a competitive market the demand curve shows the ________ received by consumers and the supply curve shows the ________. net benefit; net cost utility; average cost. marginal benefit; marginal cost economic surplus; opportunity cost

C

The difference between the ________ and the ________ from the sale of a product is called producer surplus. highest price a firm wold have been willing to accept; lowest price it was willing to accept cost to produce a product; profit received lowest price a firm would have been willing to accept; price it actually receives cost to produce a product; price a firm actually receives

C

The total amount of producer surplus in a market is equal to... the area between the demand curve and the supply curve below the market price. the difference between quantity supplied and quantity demanded. the area above the market supply curve and below the market price. the area above the market supply curve.

C

Consumer surplus in a market for a product would be equal to ________ if the market price was zero. the area above the supply curve the area between the supply curve and the demand curve zero the area under the demand curve

D

Consumers are willing to purchase a product up to the point where... the marginal benefit of consuming the product is equal to the marginal cost of consuming it. the consumer surplus is equal to the producer surplus. the marginal benefit of consuming the product equals the area below the supply curve and above the market price. the marginal benefit of consuming a product is equal to its price.

D

If the price of chewing gum is represented by equation P = 25 - 0.5 QD, then the corresponding quantity of chewing gum demanded is represented by the equation... QD = 0.5P + 25. QD = 2P - 0.5. QD = -5 + 10P. QD = 50 -2P.

D

If there is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and consumer surplus plus producer surplus is maximized, then... profits are maximized. costs are minimized. maximum deadweight loss occurs. economic efficiency is achieved.

D

Suppliers will be willing to supply a product only if... the price is higher than the average cost of producing the product. the price received is at least double the additional cost of producing the product. the price received is less than the additional cost of producing the product. the price received is at least equal to the additional cost of producing the product.

D

________ refers to the reduction in economic surplus resulting from not being in competitive equilibrium.

deadweight loss

Each point on a ________ curve shows the willingness of consumers to purchase a product at different prices. marginal cost demand supply production possibilities

demand

If marginal benefit is greater than marginal cost, output is inefficiently high. true false

false

The total amount of producer surplus in a market is equal to the area below the supply curve. true false

false

A ________ curve shows the marginal cost of producing one more unit of a good or service. production possibilities marginal benefit supply demand

supply

Marginal cost is the additional cost to a firm of producing one more unit of a good or service. true false

true

Marginal cost is the additional cost to a firm of producing one more unit of a good or service. true false

true

Producer surplus is the difference between the lowest price a firm is willing to accept for a product and the price it actually receives for the product. true false

true