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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 Alex,Barb,and Carlos are the only three buyers of oranges,and only three oranges can be supplied per day. 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 Alex,Barb,and Carlos 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,total consumer surplus A) increases by $2.50. B) decreases by $0.80. C) decreases by $2.50. D) decreases by $3.40. -Refer to Table 7-5.If the market price of an orange increases from $0.70 to $1.40,total consumer surplus


A) increases by $2.50.
B) decreases by $0.80.
C) decreases by $2.50.
D) decreases by $3.40.

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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 Alex,Barb,and Carlos are the only three buyers of oranges,and only three oranges can be supplied per day. 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 Alex,Barb,and Carlos 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 is $1.20,consumer surplus amounts to A) $0.70. B) $1.10. C) $1.40. D) $5.00. -Refer to Table 7-5.If the market price of an orange is $1.20,consumer surplus amounts to


A) $0.70.
B) $1.10.
C) $1.40.
D) $5.00.

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Figure 7-17 Figure 7-17 -Refer to Figure 7-17.The equilibrium allocation of resources is A) efficient because total surplus is maximized at the equilibrium. B) efficient because consumer surplus is maximized at the equilibrium. C) inefficient because consumer surplus is larger than producer surplus at the equilibrium. D) inefficient because total surplus is maximized when 10 units of output are produced and sold. -Refer to Figure 7-17.The equilibrium allocation of resources is


A) efficient because total surplus is maximized at the equilibrium.
B) efficient because consumer surplus is maximized at the equilibrium.
C) inefficient because consumer surplus is larger than producer surplus at the equilibrium.
D) inefficient because total surplus is maximized when 10 units of output are produced and sold.

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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. 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 you have two (essentially) identical tickets that you sell to the group in an auction,what will be the selling price for each ticket? A) $21 B) $26 C) $51 D) $61 -Refer to Table 7-4.If you have two (essentially) identical tickets that you sell to the group in an auction,what will be the selling price for each ticket?


A) $21
B) $26
C) $51
D) $61

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Given the following equations two equations: Given the following equations two equations: Show how equation (1)can be used to derive equation (2). Show how equation (1)can be used to derive equation (2).

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Start with the equation: Total Surplus =...

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Consumer surplus measures the benefit to buyers of participating in a market.

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Figure 7-11 Figure 7-11 -Refer to Figure 7-11.When the price is P1,producer surplus is A) A. B) C. C) A+B. D) C+D. -Refer to Figure 7-11.When the price is P1,producer surplus is


A) A.
B) C.
C) A+B.
D) C+D.

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A consumer's willingness to pay directly measures


A) the extent to which advertising and other external forces have influenced the consumer's preferences.
B) the cost of a good to the buyer.
C) how much a buyer values a good.
D) consumer surplus.

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Welfare economics is the study of the welfare system.

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If Darby values a soccer ball at $50,and she pays $40 for it,her consumer surplus is $10.

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If producing a soccer ball costs Jake $5,and he sells it for $40,his producer surplus is $35.

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Table 7-6 The following table represents the costs of five possible sellers. Table 7-6 The following table represents the costs of five possible sellers. -Refer to Table 7-6.If the market price is $1,100,the combined total cost of all participating sellers is A) $3,700. B) $2,700. C) $2,250. D) $1,250. -Refer to Table 7-6.If the market price is $1,100,the combined total cost of all participating sellers is


A) $3,700.
B) $2,700.
C) $2,250.
D) $1,250.

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Olaf would be willing to pay $35 to attend a dog show,but he buys a ticket for $20.Olaf values the dog show at


A) $15.
B) $20.
C) $35.
D) $50.

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


A) It increases.
B) It decreases.
C) It remains unchanged.
D) It may increase,decrease,or remain unchanged.

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The marginal seller is the seller


A) for whom the marginal cost of producing one more unit of output is the lowest among all sellers,and the marginal buyer is the buyer for whom the marginal benefit of one more unit of the good is the highest among all buyers.
B) who supplies the smallest quantity of the good among all sellers,and the marginal buyer is the buyer who demands the smallest quantity of the good among all buyers.
C) who would leave the market first if the price were any lower,and the marginal buyer is the buyer who would leave the market first if the price were any higher.
D) who has the largest producer surplus,and the marginal buyer is the buyer who has the largest consumer surplus.

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Figure 7-7 Figure 7-7 -Refer to Figure 7-7.Which area represents producer surplus when the price is P1? A) BCG B) ACH C) ABGD D) DGH -Refer to Figure 7-7.Which area represents producer surplus when the price is P1?


A) BCG
B) ACH
C) ABGD
D) DGH

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Externalities are


A) side effects passed on to a party other than the buyers and sellers in the market.
B) side effects of government intervention in markets.
C) external forces that cause the price of a good to be higher than it otherwise would be.
D) external forces that help establish equilibrium price.

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Which of the following will cause a decrease in producer surplus?


A) the imposition of a binding price ceiling in the market
B) an increase in the number of buyers of the good
C) income increases and buyers consider the good to be normal
D) the price of a complement decreases

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Figure 7-17 Figure 7-17 -Refer to Figure 7-17.If 10 units of the good are produced and sold,then A) the marginal cost to sellers exceeds the marginal value to buyers. B) producer surplus is maximized. C) total surplus is minimized. D) the marginal value to buyers exceeds the marginal cost to sellers. -Refer to Figure 7-17.If 10 units of the good are produced and sold,then


A) the marginal cost to sellers exceeds the marginal value to buyers.
B) producer surplus is maximized.
C) total surplus is minimized.
D) the marginal value to buyers exceeds the marginal cost to sellers.

Correct Answer

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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. 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 you have a ticket that you sell to the group in an auction,what will be the selling price? A) $21 B) $26 C) $51 D) $61 -Refer to Table 7-4.If you have a ticket that you sell to the group in an auction,what will be the selling price?


A) $21
B) $26
C) $51
D) $61

Correct Answer

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