Micro Exam 2 Chapter 7
According to the graph at price P1 producer surplus is A
False
According to the graph shown when the price P2, producer surplus is A.
False
According to the graph shown when the price falls from P2 to P1 producer surplus decreases by an amount equal to A
False
According to the graph shown, area B represents producer surplus to new producers entering the market as the result of price rising from p1 to p2
False
Amy buys a new dog for 150 she recieves consumer surplus of 100 on her purchase he willingness to pay is $50
False
At nicks bakery the cost to make his homemade chocolate cake is $3 per cake he sells three and receives a total of $21 worth of producer surplus. nick must be selling his cakes for $3 each
False
Janine would be willing to pay $50 to see les mis, but buys a ticket for only 30 janine values the performance at $20
False
SHannon buys a new CD player for her car for $135. she recieves consumer surplus of 25 on her purchase. her willingness to pay is 25
False
Welfare economics is the study of the well-being or less fortunant people
False
With respect to welfare economis the equilibrium price of a product is considered to be the best price because it maximizes total revenue to firms and total utility to buyers
False
a consumers willingness to pay measure the cost of good to the buyer
False
producer surplus equals value to buyers amount paid by buyers
False
Willingness to pay measure the amount a buy is will to pay for a good minus the amount the buyer actually pays
False (backwards)
a supply curve can be used to measure producer surplus because it reflects the actions of sellers
Fasle
Belva is willing to pay 65.00 for a pair of shoes for a formal dance, she finds a pair at her favorite outlet shoe store for 48.oo belvas consumer surplus is $17
True
Consumer surplus is a buyers willingness to pay minus the price
True
Cost is a measure of the sellers willingness to sell
True
Producer surplus measures he well-being of sellers
True
according to the graph shown B+C represents total surplus in the market when price is P1
True
Cost refers to the sellers producer surplus
false
Out of pockets expenses plus the value of the sellers own resources use in production are considered to be the sellers total rev
false
a seller would be willing to sell as product only if the price received is less than the cost of production
false
denea producer cookies her production cost is $3 per dozen she sells the cookies for $8 per dozen her producer surplus is $3 per dozen
false
donald produces nails at a cost of 200 per ton if he sells the nails for 500 per ton his producer surplus is 200 per ton
false
if demand decreases the price of a product as well as producer surplus increases
false
if you pay a price exactly equal to your willingness to pay then your consumer surplus is negative
false
is roberts sells a shirt for $30 and her producer surplus from the sale is 21 her cost must have been $52
false
producer surplus is the area under the supply curve to the left of the amount sold
false
suppose consumer income increases if grass seed is a normal good the equilibrium price of grass seed will decrease and producer surplus in industry will decrease
false
the area below a demand curve and above the price measure producer surplus
false
the marginal seller is the seller who cannot compete with the other sellers in the market
false
the surgeon general announces that eating chocolate increases tooth decay. as a result the equilibrium market price of chocolate increases and producer surplus increases
false
total surplus in a market equals value to buyers- amount paid by buyers
false
total surplus in a market is represented by the total area under the demand curve and above the price
false
total surplus in a market is the total costs to sellers of providing the goods less the total value to buyers of the goods
false
we can say that the allocation of resources is efficient is producer surplus is maximized
false
when market fail public policy can do nothing to improve the situation
false
At the Equi. price, the good will be purchased by those buyers who value the good more than the price
true
Suppose the demand for nachos increases. producer surplus in the market for nachos will increase
true
a demand curve measures a buyers willingness to pay
true
according to the graph shown B represents consumer surplus when the price is P1
true
according to the graph shown C represents producer surplus when the price is P1
true
an allocation of resources is said to be inefficicnet if a good is not being produced by the sellers with the lowest cost
true
consumer surplus equals the value to buyers amount paid by buyers
true
efficiency occurs when total surplus is maximized
true
externalities are side effects passed on to a party other than the buyers and sellers in the market
true
if a market is allowed to move freely to its equillibrium priceand quantity then an increase in supply will increase consumer surplus
true
if the price a consumer pays for a product is equal to a consumer surplus of that purchase would be zero.
true
if the price of a good increases consumer surplus decreases
true
in a market total surplus is equal to producer surplus consumer surplus
true
in most markets consumer surplus reflect economic well-being
true
inefficiency exists in any economy when a good is not being consumed by buyers who value it most highly
true
is a consumer is willing and able to pay $20.00 for a particular good but only has to pay 14 the consumer surplus is 6
true
suppose there is an early freeze in califronia that ruins the lemon crop. consumer surplus in the market for lemons decreases
true
the invisible hand refers to the marketplace guiding the self interests of market participants into promoting general economic well-being
true
total surplus = value to sellers - costs of sellers is not correct
true
total surplus in a market equals consumer surplus + producer surplus
true
when economists say that markets are efficient they are assuming that markets are perfectly competetitive
true
when technology improves in the ice cream industry consumer surplus will increase
true
