Final Exam Practice Questions Ch 7

Refer to Figure 7-18. At the equilibrium price, total surplus is a. $480. b. $640. c. $1,120. d. $1,280.

$1,120

Refer to Figure 7-19. At equilibrium, producer surplus is represented by the area a. F. b. F+G. c. D+H+F. d. D+H+F+G+I

D+H+F

A drought in California destroys many red grapes. As a result of the drought, the consumer surplus in the market for red grapes a. increases, and the consumer surplus in the market for red wine increases. b. increases, and the consumer surplus in the market for red wine decreases. c. decreases, and the consumer surplus in the market for red wine increases. d. decreases, and the consumer surplus in the market for red wine decreases

decreases, and the consumer surplus in the market for red wine decreases

We can say that the allocation of resources is efficient if a. producer surplus is maximized. b. consumer surplus is maximized. c. total surplus is maximized. d. sellers' costs are minimized.

total surplus is maximized

Refer to Figure 7-18. The efficient price is a. $22, and the efficient quantity is 40. b. $22, and the efficient quantity is 110. c. $16, and the efficient quantity is 80. d. $8, and the efficient quantity is 40.

$16, and the efficient quantity is 80

Refer to Figure 7-18. If the price decreases from $22 to $16 due to a shift in the supply curve, consumer surplus increases by a. $120. b. $360. c. $480. d. $600

$360

Refer to Figure 7-18. Assume demand increases and as a result, equilibrium price increases to $22 and equilibrium quantity increases to 110. The increase in producer surplus to producers already in the market would be a. $90. b. $210. c. $360. d. $480.

$480

Refer to Figure 7-18. At the equilibrium price, consumer surplus is a. $480. b. $640. c. $1,120. d. $1,280.

$480

Refer to Figure 7-18. Assume demand increases and as a result, equilibrium price increases to $22 and equilibrium quantity increases to 110. The increase in producer surplus would be a. $210. b. $360. c. $480. d. $570.

$570

Refer to Figure 7-18. At the equilibrium price, producer surplus is a. $480. b. $640. c. $1,120. d. $1,280.

$640

Refer to Figure 7-18. Assume demand increases and as a result, equilibrium price increases to $22 and equilibrium quantity increases to 110. The increase in producer surplus due to new producers entering the market would be a. $90. b. $210. c. $360. d. $480.

$90

Refer to Figure 7-19. At equilibrium, consumer surplus is represented by the area a. A. b. A+B+C. c. D+H+F. d. A+B+C+D+H+F.

A+B+C

Refer to Figure 7-19. At equilibrium, total surplus is represented by the area a. A+B+C. b. A+B+D+F. c. A+B+C+D+H+F. d. A+B+C+D+H+F+G+I

A+B+C+D+H+F

On a graph, consumer surplus is represented by the area a. between the demand and supply curves. b. below the demand curve and above price. c. below the price and above the supply curve. d. below the demand curve and to the right of equilibrium price.

below the demand curve and above price