Question 1

Which of the following is correct?

Accepted Answer

A)  Consumer surplus refers to a situation in which there are more buyers than sellers in a market.
B)  Producer surplus refers to a situation in which there are more sellers than buyers in a market.
C)  Total surplus is measured as the area below the demand curve and above the supply curve, up to the equilibrium quantity.
D)  All of the above are correct.E) A) and C)
F) None of the above

Question 2

ABC Company incurs a cost of 50 cents to produce a dozen eggs, while XYZ Company incurs a cost of 70 cents to produce a dozen eggs. Which of the following price increases would cause both companies to experience an increase in producer surplus?

Accepted Answer

A)  The price of a dozen eggs increases from 40 cents to 55 cents.
B)  The price of a dozen eggs increases from 55 cents to 70 cents.
C)  The price of a dozen eggs increases from 55 cents to 75 cents.
D)  All of these price increases would cause both companies to experience a loss in producer surplus.E) A) and C)
F) All of the above

Question 3

Table 7-5
For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day. 
-Refer to Table 7-5. If the market price of an orange increases from $0.70 to $1.40, then consumer surplus

Accepted Answer

A)  increases by $2.60.
B)  decreases by $0.70.
C)  decreases by $2.50.
D)  decreases by $2.60.E) A) and C)
F) A) and B)

Question 4

Table 7-16 
-Refer to Table 7-16. Both the demand curve and the supply curve are straight lines. At equilibrium, producer surplus is

Accepted Answer

A)  $24.
B)  $32.
C)  $48.
D)  $64.E) B) and D)
F) All of the above

Question 5

Dawn's bridal boutique is having a sale on evening dresses. The increase in consumer surplus comes from the benefit of the lower prices to

Accepted Answer

A)  only existing customers who now get lower prices on the gowns they were already planning to purchase.
B)  only new customers who enter the market because of the lower prices.
C)  both existing customers who now get lower prices on the gowns they were already planning to purchase and new customers who enter the market because of the lower prices.
D)  Consumer surplus does not increase; it decreases.E) A) and B)
F) C) and D)

Question 6

At Nick's Bakery, the cost to make homemade chocolate cake is $4 per cake. As a result of selling five cakes, Nick experiences a producer surplus in the amount of $17.50. Nick must be selling his cakes for

Accepted Answer

A)  $6.50 each.
B)  $7.50 each.
C)  $9.50 each.
D)  $10.50 each.E) All of the above
F) B) and C)

Question 7

Figure 7-22 
-Refer to Figure 7-22. If the price decreases from $80 to $70 due to a shift in the supply curve, consumer surplus increases by

Accepted Answer

A)  $250.
B)  $750.
C)  $1000.
D)  $500.E) None of the above
F) A) and C)

Exam 7: Consumers, Producers, and the Efficiency of Markets

Dawn's bridal boutique is having a sale on evening dresses. The increase in consumer surplus comes from the benefit of the lower prices to

Correct Answer
verified

At Nick's Bakery, the cost to make homemade chocolate cake is $4 per cake. As a result of selling five cakes, Nick experiences a producer surplus in the amount of $17.50. Nick must be selling his cakes for

Correct Answer
verified

Figure 7-22 -Refer to Figure 7-22. If the price decreases from $80 to $70 due to a shift in the supply curve, consumer surplus increases by

Correct Answer
verified

ABC Company incurs a cost of 50 cents to produce a dozen eggs, while XYZ Company incurs a cost of 70 cents to produce a dozen eggs. Which of the following price increases would cause both companies to experience an increase in producer surplus?

Correct Answer
verified

Which of the following is correct?

Correct Answer
verified

Table 7-16 -Refer to Table 7-16. Both the demand curve and the supply curve are straight lines. At equilibrium, producer surplus is

Correct Answer
verified

Correct Answer
verified

Exam 7: Consumers, Producers, and the Efficiency of Markets

Dawn's bridal boutique is having a sale on evening dresses. The increase in consumer surplus comes from the benefit of the lower prices to

Correct AnswerverifiedShow Answer

At Nick's Bakery, the cost to make homemade chocolate cake is $4 per cake. As a result of selling five cakes, Nick experiences a producer surplus in the amount of $17.50. Nick must be selling his cakes for

Correct AnswerverifiedShow Answer

Figure 7-22 -Refer to Figure 7-22. If the price decreases from $80 to $70 due to a shift in the supply curve, consumer surplus increases by

Correct AnswerverifiedShow Answer

ABC Company incurs a cost of 50 cents to produce a dozen eggs, while XYZ Company incurs a cost of 70 cents to produce a dozen eggs. Which of the following price increases would cause both companies to experience an increase in producer surplus?

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

Table 7-16 -Refer to Table 7-16. Both the demand curve and the supply curve are straight lines. At equilibrium, producer surplus is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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