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

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Question 231

Multiple Choice

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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

A) $1.40.
B) $14.
C) $3.80.
D) $52.

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

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Question 232

Multiple Choice

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When the demand for a good increases and the supply of the good remains unchanged, consumer surplus

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

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

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Question 233

Multiple Choice

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Tom tunes pianos in his spare time for extra income. Buyers of his service are willing to pay $155 per tuning. One particular week, Tom is willing to tune the first piano for $120, the second piano for $125, the third piano for $140, and the fourth piano for $160. Assume Tom is rational in deciding how many pianos to tune. His producer surplus is

If a market is allowed to adjust freely to its equilibrium price and quantity, then an increase in demand will

A supply curve can be used to measure producer surplus because it reflects

If a consumer places a value of $15 on a particular good and if the price of the good is $17, then the

Figure 7-19 -Refer to Figure 7-19. If the government imposes a price floor of $55 in this market, then total surplus will be

Figure 7-26 -Refer to Figure 7-26. At the equilibrium price, total surplus is

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?

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

Which of the following is not correct?

When markets fail, public policy can potentially remedy the problem and increase economic efficiency.

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 is $0.65, then consumer surplus amounts to

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

Table 7-10 The following table represents the costs of five possible sellers. -Refer to Table 7-10. If the price is $1,l50, who would be willing to supply the product?

Table 7-17 The following table shows the willingness to pay for a good for the only four consumers in a market. -Refer to Table 7-17. If the price of the good is $20, how many units will be demanded?

Table 7-14 -Refer to Table 7-14. You want to hire a professional photographer to take pictures of your family. The table shows the costs of the four potential sellers in the local photography market. You hire Kevin for a price of $500. What is his producer surplus?

If John's willingness to pay for a good is $20 and the price of the good is $15, how much is John's consumer surplus from purchasing the good?

If an allocation of resources is efficient, then

Figure 7-23 -Refer to Figure 7-23. At equilibrium, total surplus is represented by the area