Homework #15 Micro-Economics
Figure 7-19. At the equilibrium price, consumer surplus is...
$100
Figure 7-19. At the equilibrium price, producer surplus is...
$150
Figure 7-7. What is the consumer surplus if the price is $100?
$2,500
Figure 7-19. At the equilibrium price, total surplus is...
$250
At Nick's Bakery, the cost to make a cheese danish is $1.50 per danish. As a result of selling ten danishes, Nick experiences a producer surplus in the amount of $20. Nick must be selling his danishes for...
$3.50 each
Table 7-1. If the price of the product is $122, then the total consumer surplus is...
$41
Bob purchases a book, and his consumer surplus is $3. If Bob is willing to pay $8 for the book, then the price of the book must be...
$5
Figure 7-24. At equilibrium, total surplus is...
$54
Figure 7-19. If the government imposes a price floor of $55 in this market, then total surplus will be...
$62.50 lower than it would be without the price floor
Figure 7-15. When the price is P2, producer surplus is...
A+B+C
Figure 7-3. When the price is P1, consumer surplus is...
A+B+C
Figure 7-24. At equilibrium, total surplus is measure by the area...
ABD
Figure 7-10. Which area represents the increase in producer surplus when the price rises from P1 to P2?
AHGB
Figure 7-10. Which area represents producer surplus when the price is P1?
BCG
Economists tend to see ticket scalping as...
a way of increasing the efficiency of ticket distribution
A demand curve reflects each of the following except the...
ability of buyers to obtain the quantity they desire
Producer surplus measures the...
benefits to sellers of participating in a market
If a consumer places a value of $20 on a particular good and if the price of the good is $25, then the...
consumer does not purchase the good
Figure 7-15. When the price falls from P2 to P1, producer surplus...
decrease by an amount equal to A+B
If the demand for leather decreases, producer surplus in the leather market...
decreases
Welfare economics is the study of...
how the allocation of resources affects economic well-being
Tomato sauce and spaghetti noodles are complementary goods. A decrease in the price of tomatoes will...
increase consumer in the market for tomato sauce and increase producer surplus in the market for spaghetti noodles
A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it...
maximizes the combined welfare of buyers and sellers
Willingness to pay...
measures the value that a buyer places on a good
Which of the following equations is valid?
producer surplus = total surplus - consumer surplus
A supply curve can be used to measure producer surplus because it reflects...
sellers' costs
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 producing goods that go unsold
Which of the following will cause a decrease in producer surplus?
the imposition of a binding price ceiling in the market
Efficiency is attained when...
total surplus is maximized
Figure 7-7. What happens to the consumer surplus if the price rises form $100 to $150?
the new consumer surplus is 25 percent of the original consumer surplus
Producer surplus directly measures...
the well-being of sellers
Table 7-9. If there is only one unit of the good available for purchase, and if the buyers bid against each other for the right to purchase it, then the consumer surplus will be...
$8 or slightly less
Table 7-10. If the market price is $1,200, the producer surplus in the market is...
$800
Producer surplus is the...
amount a seller is paid minus the cost of production
Suppose that the equilibrium price in the market for tomatoes is $3 per pound. If a law reduced the maximum legal price for tomatoes is $2 per pound,...
any possible increase in consumer surplus would be smaller than the loss of producer surplus
Total surplus is represented by the area...
between the demand and supply curves up to the point of equilibrium
On a graph, the area below a demand curve and above the price measures....
consumer surplus
Total surplus in a market is equal to...
consumer surplus + producer surplus
All else equal, what happens to consumer surplus if the price of a good increases?
consumer surplus decreases
