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

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Question 91

Multiple Choice

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Table 7-10 The only four consumers in a market have the following willingness to pay for a good: Buyer Willingness to Pay -Refer to Table 7-10. If the market price for the good is $20, who will purchase the good?

A) Danita only
B) Carolyn and Danita only
C) Ashleigh, Barb, and Carolyn only
D) All four buyers would purchase the good.

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

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Question 92

Multiple Choice

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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. Who experiences the largest gain in consumer surplus when the price of an orange decreases from $1.05 to $0.75?

A) Allison
B) Bob
C) Charisse
D) Allison and Bob experience the same gain in consumer surplus, and Charisse's gain is zero.

E) B) and C)
F) A) and D)

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Question 93

Multiple Choice

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Figure 7-6 -Refer to Figure 7-6. At the equilibrium price, consumer surplus is

Consumer surplus

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

Total surplus in a market will increase when the government

All else equal, an increase in supply will cause an increase in consumer surplus.

Table 7-4 The numbers in Table 7-1 reveal the maximum willingness to pay for a ticket to a Chicago Cubs vs. St. Louis Cardinal's baseball game at Wrigley Field. -Refer to Table 7-4. If tickets sell for $40 each, then what is the total consumer surplus in the market?

Figure 7-8 -Refer to Figure 7-8. If the government imposes a price floor of $100 in this market, then consumer surplus will decrease by

Ticket scalping can increase total surplus in the market for tickets to sporting events.

Figure 7-31 -Refer to Figure 7-31. If the market equilibrium price rises from $25 to $35, how much is the increase in producer surplus to the producers supplying units at the initial $25 price?

Table 7-2 This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. -Refer to Table 7-2. Which of the following is not true?

For any given quantity, the price on a demand curve represents the marginal buyer's willingness to pay.

Denise values a stainless steel dishwasher for her new house at $500. The actual price of the dishwasher is $650. Denise

Producer surplus measures the

Scenario 7-1 Suppose market demand is given by the equation -Refer to Scenario 7-1. If the market equilibrium price falls from $10 to $5, what is the change in total consumer surplus in the market?

Figure 7-13 -Refer to Figure 7-13. If the equilibrium price rises from $60 to $120, what is the additional producer surplus to initial producers in the market?

Table 7-2 This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. -Refer to Table 7-2. If the market price is $5.50, the consumer surplus in the market will be

Table 7-15 -Refer to Table 7-15. You and your best friend want to hire a professional photographer to take pictures of your two families. The table shows the costs of the four potential sellers in the local photography market. You and your friend take bids from the sellers. Who offers the two winning bids, and what do they offer to charge for the photography sessions?

In order to calculate consumer surplus in a market, we need to know willingness to pay and price.