Ole Miss Econ 201 chapter 7 cheng cheng
If the price of the good is $9.50, then producer surplus is
$10.00.
At equilibrium, total surplus is
$108.
If the government imposes a price floor of $120 in this market, then consumer surplus will decrease by
$225.
At the equilibrium price, consumer surplus is
$300.
If the price of the good is $250, then consumer surplus amounts to
$50.
If the price of the good is $50, then consumer surplus amounts to
$600.
If Gina sells a shirt for $40, and her producer surplus from the sale is $32, her cost must have been
$8.
On a graph, the area below a demand curve and above the price measures
. consumer surplus
If the supply curve is S, the demand curve is D, and the equilibrium price is $100, what is the producer surplus?
2,500
If the price of the product is $18, then the total consumer surplus is
46
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
500
When the price is P1, consumer surplus is
A+B+C.
When the price rises from P1 to P2, which area represents the increase in producer surplus to existing producers?
ABGD
At equilibrium, total surplus is measured by the area
ACG.
Which area represents producer surplus when the price is P2?
ACH
Which area represents the increase in producer surplus when the price rises from P1 to P2?
AHGB
If 6 units of the good are produced and sold, then
All of the above are correct.
Total surplus
All of the above are correct.
Which area represents producer surplus when the price is P1?
BCG
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.
At equilibrium, producer surplus is measured by the area
CFG.
All else equal, what happens to consumer surplus if the price of a good increases?
Consumer surplus decreases.
Suppose there is an early freeze in California that reduces the size of the lemon crop. What happens to consumer surplus in the market for lemons?
Consumer surplus decreases.
Which area represents the increase in producer surplus when the price rises from P1 to P2 due to new producers entering the market?
DGH
Suppose the demand for peanuts increases. What will happen to producer surplus in the market for peanuts?
It increases.
If the price of the product is $22, then who would be willing to purchase the product?
Lori and Audrey
If the price of the product is $15, then who would be willing to purchase the product?
Lori, Audrey, and Zach
If the supply curve is S and the demand curve shifts from D to D', what is the change in producer surplus?
Producer surplus increases by $3,125.
Total surplus is represented by the area
between the demand and supply curves up to the point of equilibrium.
If a consumer places a value of $15 on a particular good and if the price of the good is $17, then the
consumer does not purchase the good.
Total surplus in a market is equal to
consumer surplus + producer surplus.
Area C represents the
consumer surplus to new consumers who enter the market when the price falls from P2 to P1.
When the price rises from P1 to P2, consumer surplus
decreases by an amount equal to B+C.
The equilibrium allocation of resources is
efficient because total surplus is maximized at the equilibrium.
A consumer's willingness to pay directly measures
how much a buyer values a good.
A seller is willing to sell a product only if the seller receives a price that is at least as great as the
seller's cost of production.
Cost is a measure of the
seller's willingness to sell.
A supply curve can be used to measure producer surplus because it reflects
sellers' costs.
If 4 units of the good are produced and sold, then
the allocation of resources is inefficient.
Consumer surplus is
the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.
If 10 units of the good are produced and sold, then
the marginal cost to sellers exceeds the marginal value to buyers.
Efficiency in a market is achieved when
the sum of producer surplus and consumer surplus is maximized.
Producer surplus directly measures
the well-being of sellers.
Economists typically measure efficiency using
total surplus.
At the equilibrium price of a good, the good will be purchased by those buyers who
value the good more than price.
In a market, the marginal buyer is the buyer
who would be the first to leave the market if the price were any higher.
If the price a consumer pays for a product is equal to a consumer's willingness to pay, then the consumer surplus relevant to that purchase is
zero
