microeconomics chp 78 pt 1

Noah drinks Dr. Pepper. He can buy as many cans of Dr. Pepper as he wishes at a price of $0.50 per can. On a particular day, he is willing to pay $0.95 for the first can, $0.80 for the second can, $0.60 for the third can, and $0.40 for the fourth can. Assume Noah is rational in deciding how many cans to buy. His consumer surplus is

0.85

someone is willing to pay 68 for a pair of shoes for a formal dance she finds a pair at her favorite outlet show store for 48 her consumer surplus is

20

Ronnie operates a lawn-care service. On each day, the cost of mowing the first lawn is $10; the cost of mowing the second lawn is $12; and the cost of mowing the third lawn is $15. His producer surplus on the first three lawns of the day is $53. If Ronnie charges all customers the same price for lawn mowing, that price is

30

Figure 7-9 at the equilibrium price consumer surplus is

480

refer to figure 7- 9 at the equilibrium price, producer surplus is

640

if an allocation of resources is efficient then

all potential gains from trade among buyers are sellers being realized

Refer to Figure 7-5. If the price of the good is $8.50, then producer surplus is

b. $8.00.

On a graph, consumer surplus is the area

below the demand curve and above price.

Total surplus in a market is represented by the total area

between the demand and supply curves up to the point of equilibrium

Sally sharpens knives in her spare time for extra income. Buyers of her service are willing to pay $2.50 per knife for as many knives as Sally is willing to sharpen. On a particular day, she is willing to sharpen the first knife for $1.75, the second knife for $2.25, the third knife for $2.75, and the fourth knife for $3.25. Assume Sally is rational in deciding how many knives to sharpen. Her producer surplus is

c. $1.00.

If the price of the good is $14, then producer surplus is

c. $25.

which of the following statements is not correct about a market equilibrium

consumer surplus will be equal to producer surplus

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?`

decreases

Suppose Katie, Kendra, and Kristen each purchase a particular type of cell phone at a price of $80. Katie's willingness to pay was $100, Kendras's willingness to pay was $95, and Kristen's willingness to pay was $80. Which of the following statements is correct?

for the three individuals together consumer surplus a mounts to 35

a consumers willingness to pay directly measures

how much a buyer values a good

The particular price that results in quantity supplied being equal to quantity demanded is the best price because it

maximizes the combined welfare of buyers and sellers

Suppose televisions are a normal good and buyers of televisions experience a decrease in income. As a result, consumer surplus in the television market

may increase, decrease, or remain unchanged.

consumer surplus is

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

in which of the following circumstances would a buyer be indifferent about buying a good

the amount of consumer surplus the buyer would experience as a result of buying the good is zero the price of the good is equal to the buyers willingness to pay for the good the price of the good is equal to the value the buyers places on the good

Producer surplus measures

the benefits to sellers of participating in a market

We can say that the allocation of resources is efficient if

total surplus is maximized