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

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Question 131

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Table 7-1 -Refer to Table 7-1. If the price of the product is $130, then who would be willing to purchase the product?

A) Calvin
B) Calvin and Sam
C) Calvin, Sam, and Andrew
D) Calvin, Sam, Andrew, and Lori

E) C) and D)
F) None of the above

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Question 132

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Scenario 7-2 Suppose market demand and market supply are given by the equations: -Refer to Scenario 7-2. How much is total producer surplus at the equilibrium price in this market?

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Total producer surpl...

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Question 133

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Abraham drinks Mountain Dew. He can buy as many cans of Mountain Dew as he wishes at a price of $0.55 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 Abraham is rational in deciding how many cans to buy. His consumer surplus is

Free markets allocate a) the supply of goods to the buyers who value them most highly and b) the demand for goods to the sellers who can produce them at least cost.

Consumer surplus in a market can be represented by the

Bill created a new software program he is willing to sell for $300. He sells his first copy and enjoys a producer surplus of $250. What is the price paid for the software?

Economists argue that restrictions against ticket scalping actually drive up the cost of many tickets.

Total surplus in a market is equal to

If the United States changed its laws to allow for the legal sale of a kidney, which of the following is likely to occur?

Economists typically measure efficiency using

Figure 7-19 -Refer to Figure 7-19. At the equilibrium price, consumer surplus is

Figure 7-21 -Refer to Figure 7-21. When the price is P1, area B represents

Figure 7-30 -Refer to Figure 7-30. If the market equilibrium price is $120, how much is total consumer surplus?

Figure 7-23 -Refer to Figure 7-23. If the price were P3, consumer surplus would be represented by the area

You are offered a free ticket to see the Chicago Cubs play the Chicago White Sox at Wrigley Field. Assume the ticket has no resale value. Willie Nelson is performing on the same night, and his concert is your next-best alternative activity. Tickets to see Willie Nelson cost $40. On any given day, you would be willing to pay up to $50 to see and hear Willie Nelson perform. Assume there are no other costs of seeing either event. Based on this information, at a minimum, how much would you have to value seeing the Cubs play the White Sox to accept the ticket and go to the game?

David tunes pianos in his spare time for extra income. Buyers of his service are willing to pay $135 per tuning. One particular week, David is willing to tune the first piano for $115, the second piano for $125, the third piano for $140, and the fourth piano for $175. Assume David is rational in deciding how many pianos to tune. His producer surplus is

Kelly is willing to pay $5.20 for a gallon of gasoline. The price of gasoline at her local gas station is $3.80. If she purchases ten gallons of gasoline, then Kelly's consumer surplus is

Figure 7-34 -Refer to Figure 7-34. Suppose the government imposes a price floor at $10 per unit in this market. With the price floor, how much is total producer surplus assuming those producers with the lowest cost are the ones who supply the market?

Suppose the demand for peaches decreases. What will happen to producer surplus in the market for peaches?

Table 7-16 The following table represents the costs of five possible sellers. Seller Cost $) -Refer to Table 7-16. Suppose each of the five sellers can supply at most one unit of the good. At which of the following prices would the market quantity supplied be exactly three units?