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Assume the market depicted in the graph is in equilibrium. Which of the following statements is true? A) Consumer surplus is greater than producer surplus. B) Producer surplus is greater than consumer surplus. C) Consumer surplus is the same as producer surplus. D) Total surplus is smaller than producer surplus. Assume the market depicted in the graph is in equilibrium. Which of the following statements is true?


A) Consumer surplus is greater than producer surplus.
B) Producer surplus is greater than consumer surplus.
C) Consumer surplus is the same as producer surplus.
D) Total surplus is smaller than producer surplus.

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

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Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers decreased from $15 to $10:


A) Bob's Hardware would lose $5 of producer surplus.
B) producer surplus would fall by $5 for each producer.
C) Bob's Hardware would no longer sell hammers.
D) total producer surplus would fall by $15.

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

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Assume the market depicted in the graph is in equilibrium. If the market price is set to $14, which of the following statements is true? A) Some consumers will gain surplus, but total surplus will fall. B) Some producers will gain surplus, but total surplus will fall. C) Some producers will lose surplus, but total surplus will rise. D) Some consumers will lose surplus, but total surplus will rise. Assume the market depicted in the graph is in equilibrium. If the market price is set to $14, which of the following statements is true?


A) Some consumers will gain surplus, but total surplus will fall.
B) Some producers will gain surplus, but total surplus will fall.
C) Some producers will lose surplus, but total surplus will rise.
D) Some consumers will lose surplus, but total surplus will rise.

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

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Assume the market depicted in the graph is in equilibrium. What is total surplus? A) $72 B) $90 C) $50 D) $130 Assume the market depicted in the graph is in equilibrium. What is total surplus?


A) $72
B) $90
C) $50
D) $130

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

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Assume there are three bakeries, each willing to sell one dozen cupcakes in a given time period. The Sweet Treat can offer a dozen cupcakes for a minimum of $6. The Cake Corner can offer a dozen cupcakes for a minimum of $9. Pastry Place can offer a dozen cupcakes for a minimum of $13.If the market price of one dozen cupcakes increased from $7 to $10:


A) total surplus would decrease by $5.
B) Pastry Place's producer surplus would decrease by $3.
C) total surplus would increase by $4.
D) The Cake Corner's surplus would increase by $3.

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

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According to the graph shown, if the market goes from equilibrium to having its price set at $10 producer surplus will change: A) from (F + G + H) to (B + C + D + E + F + G + H) . B) from (F + G + H) to (B + C + F + G + H) . C) from (F + G + H) to (B + F + H) . D) from (C + G) to (B + C + F + G + H) . According to the graph shown, if the market goes from equilibrium to having its price set at $10 producer surplus will change:


A) from (F + G + H) to (B + C + D + E + F + G + H) .
B) from (F + G + H) to (B + C + F + G + H) .
C) from (F + G + H) to (B + F + H) .
D) from (C + G) to (B + C + F + G + H) .

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

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According to the graph shown, if the market goes from equilibrium to having its price set at $10 producer surplus will: A) rise by area B, but fall by area G. B) rise by area B + C + D + E. C) rise by area B + C, but fall by area C + G. D) rise by area B, but fall by area C + G. According to the graph shown, if the market goes from equilibrium to having its price set at $10 producer surplus will:


A) rise by area B, but fall by area G.
B) rise by area B + C + D + E.
C) rise by area B + C, but fall by area C + G.
D) rise by area B, but fall by area C + G.

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

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If the price of a good is less than a buyer's willingness to pay, the buyer will _____ the good because the opportunity cost of buying the good is _____ than the benefit received from consuming the good.


A) purchase; less
B) purchase; more
C) not purchase; less
D) not purchase; more.

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

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Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers increased from $6 to $8:


A) producer participation in the market would increase.
B) producer participation in the market would decrease.
C) producer participation in the market would remain unchanged.
D) total producer surplus would increase by $2.

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

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Assume the market depicted in the graph is in equilibrium. If the market price is set to $7, which of the following statements is true? A) Some producers will gain surplus, but total surplus will fall. B) Some producers will lose surplus, but total surplus will rise. C) Some consumers will gain surplus, but total surplus will fall. D) Some consumers will lose surplus, but total surplus will rise. Assume the market depicted in the graph is in equilibrium. If the market price is set to $7, which of the following statements is true?


A) Some producers will gain surplus, but total surplus will fall.
B) Some producers will lose surplus, but total surplus will rise.
C) Some consumers will gain surplus, but total surplus will fall.
D) Some consumers will lose surplus, but total surplus will rise.

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

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In a well-functioning competitive market, total surplus:


A) can never be zero.
B) can never fall below zero.
C) is always zero.
D) is always below zero.

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

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Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers decreased from $13 to $11, total producer surplus would:


A) decrease from $9 to $5.
B) increase from $5 to $9.
C) decrease from $30 to $17.
D) remain unchanged.

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

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According to the graph shown, if the market goes from equilibrium to having its price set at $4: A) deadweight loss will be $90. B) consumer surplus will be $160. C) deadweight loss will be $60. D) consumer surplus will rise by $30. According to the graph shown, if the market goes from equilibrium to having its price set at $4:


A) deadweight loss will be $90.
B) consumer surplus will be $160.
C) deadweight loss will be $60.
D) consumer surplus will rise by $30.

E) A) and B)
F) All of the above

Correct Answer

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According to the graph shown, if the market goes from equilibrium to having its price set at $18: A) producer surplus will be $8,100. B) consumer surplus will be $12,150. C) deadweight loss will be $2,250. D) deadweight loss will be $1,500. According to the graph shown, if the market goes from equilibrium to having its price set at $18:


A) producer surplus will be $8,100.
B) consumer surplus will be $12,150.
C) deadweight loss will be $2,250.
D) deadweight loss will be $1,500.

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

Correct Answer

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A seller's willingness to sell:


A) must always be equal to a buyer's willingness to pay.
B) is determined by the opportunity cost of producing and selling the good.
C) is determined by a buyer's willingness to pay.
D) can never be higher than the market price.

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

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If Thelma's willingness to sell her homemade fudge is $4, at which of the following prices would Thelma sell?


A) $2
B) $3.99
C) $4.01
D) Thelma would not sell her fudge at any of these prices.

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

Correct Answer

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The market to buy and sell organs would:


A) increase the well-being of those who interacted in it.
B) not be considered missing, since surplus could be gained from it.
C) create negative surplus for those who cannot afford an organ, but need one.
D) never exist because it is unfair.

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

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Assume the market depicted in the graph is in equilibrium at demand (D) and supply (S<sub>1</sub>) . If the supply curve shifts to S<sub>2</sub>, and a new equilibrium is reached, which of the following is true? A) Consumer surplus increases and total surplus increases. B) Consumer surplus decreases and total surplus increases. C) Consumer surplus increases and total surplus decreases. D) Consumer surplus decreases and total surplus decreases. Assume the market depicted in the graph is in equilibrium at demand (D) and supply (S1) . If the supply curve shifts to S2, and a new equilibrium is reached, which of the following is true?


A) Consumer surplus increases and total surplus increases.
B) Consumer surplus decreases and total surplus increases.
C) Consumer surplus increases and total surplus decreases.
D) Consumer surplus decreases and total surplus decreases.

E) None of the above
F) All of the above

Correct Answer

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Assume the market depicted in the graph is in equilibrium. What is consumer surplus? A) $10 B) $15 C) $20 D) $30 Assume the market depicted in the graph is in equilibrium. What is consumer surplus?


A) $10
B) $15
C) $20
D) $30

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

Correct Answer

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When the market price is set below the equilibrium price:


A) total surplus increases.
B) the market is efficient.
C) deadweight loss is zero.
D) producer surplus falls.

E) All of the above
F) A) and B)

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