Question 1

A market has four individuals, each considering buying a grill. Assume that grills come in only one size and model. Martina considers herself a grill-master, and finds a grill a necessity, so she is willing to pay $400 for a grill. Javier is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Kamal wants to impress his friends with his vegetable grilling skills and is willing to pay $320 for a grill. Lina loves grilled shrimp and thinks it might be cheaper in the long run if she grills her own shrimp instead of eating out at a restaurant, so she is willing to pay $200 for a grill.If the market price of grills increases from $310 to $350:

Accepted Answer

A)  total consumer surplus would fall by $120.
B)  total consumer surplus would fall by $90.
C)  Kamal and Javier would experience a decrease in consumer surplus, but Martina's consumer surplus would rise.
D)  Kamal would experience a decrease in consumer surplus, but Martina and Javier would experience a rise in consumer surplus.E) A) and C)
F) All of the above

Question 2

Assume the market depicted in the graph is in equilibrium. What is producer surplus?

Accepted Answer

A)  $30
B)  $20
C)  $50
D)  $60E) All of the above
F) B) and C)

Question 3

Assume the market depicted in the graph is in equilibrium. Which of the following statements is true?

Accepted Answer

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

Question 4

In economics, the concept of surplus:

Accepted Answer

A)  measures the benefit that people receive when they buy something for less than they would have been willing to pay.
B)  measures the benefit that people receive when they sell something for more than they would have been willing to accept.
C)  is the best way to look at the benefits people receive from successful transactions.
D)  All of these are correct.E) A) and D)
F) A) and C)

Question 5

Assume the market depicted in the graph is in equilibrium. If supply increases:

Accepted Answer

A)  consumer surplus will increase.
B)  producer surplus will increase.
C)  total surplus will increase.
D)  quantity will increase.E) None of the above
F) A) and B)

Question 6

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:

Accepted Answer

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

Question 7

Suppose Sally purchases a pair of shoes for $45. Which of the following prices could represent Sally's willingness to pay for a pair of shoes?

Accepted Answer

A)  $15.00
B)  $25.00
C)  $44.99
D)  $55.00E) B) and D)
F) B) and C)

Question 8

1) . If the supply curve shifts to S2, and a new equilibrium is reached, which of the following is true? A) Consumer surplus increases, but producer surplus decreases. B) Consumer surplus decreases, but producer surplus increases. C) Both consumer and producer surplus increase. D) Both consumer and producer surplus decrease." class="answers-bank-image d-inline" rel="preload" > 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?

Accepted Answer

A)  Consumer surplus increases, but producer surplus decreases.
B)  Consumer surplus decreases, but producer surplus increases.
C)  Both consumer and producer surplus increase.
D)  Both consumer and producer surplus decrease.E) A) and C)
F) A) and D)

Question 9

A buyer always wants to pay a price that is as _____ as possible, but never _____ than the buyer's willingness to pay.

Accepted Answer

A)  high; higher
B)  low; lower
C)  low; higher
D)  high; lowerE) B) and C)
F) None of the above

Question 10

If Ayana's willingness to pay for a sweater is $37, which of the following prices would she have to observe in the market in order to buy a sweater?

Accepted Answer

A)  $37.01
B)  $38.00
C)  $37.00
D)  Ayana would not buy a sweater at any of these prices.E) All of the above
F) A) and B)

Question 11

Surplus refers to the difference between:

Accepted Answer

A)  the price at which a buyer or seller would be willing to trade and the actual price.
B)  the willingness to pay and the actual price paid.
C)  the willingness to sell and the actual price accepted.
D)  All of these are correct.E) A) and C)
F) B) and C)

Question 12

Assume the market depicted in the graph is in equilibrium. If its price is subsequently set at $12, deadweight loss will consist of area(s) :

Accepted Answer

A)  D + E.
B)  C + G.
C)  L.
D)  None of these are correct.E) A) and B)
F) All of the above

Question 13

Assume the market depicted in the graph is in equilibrium. Consumer surplus consists of which area(s) ?

Accepted Answer

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

Question 14

When the market price is set below the equilibrium price:

Accepted Answer

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

Question 15

A seller's willingness to sell:

Accepted Answer

A)  is the maximum price that a seller is willing to accept in exchange for a good or service.
B)  is the minimum price that a seller is willing to accept in exchange for a good or service.
C)  is always greater than a buyer's willingness to pay.
D)  must always equal a buyer's willingness to buy.E) A) and D)
F) A) and C)

Question 16

Suppose Miguel wishes to buy a baseball glove. He observes that the market price of a glove is $43 and decides not to buy one. Which of the following prices could represent Miguel's willingness to pay for a baseball glove?

Accepted Answer

A)  $37
B)  $45
C)  $50
D)  None of these could represent Miguel's willingness to pay.E) B) and C)
F) All of the above

Question 17

Assume the market depicted in the graph is in equilibrium. If the price is set below $6:

Accepted Answer

A)  producer surplus will increase.
B)  producer surplus will decrease.
C)  total surplus will increase.
D)  quantity will increase.E) A) and B)
F) A) and C)

Question 18

Assume a market has an equilibrium price of $5. If the market price is set at $9:
I. Producer surplus rises for some producers because of the increased price.
II. Producer surplus decreases for some producers because fewer transactions are taking place.
III. Total surplus may rise or fall depending on the change in producer surplus.

Accepted Answer

A)  II only
B)  I and III only
C)  I and II only
D)  I, II, and IIIE) B) and D)
F) B) and C)

Question 19

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 is $12, what would total producer surplus be?

Accepted Answer

A)  $7
B)  $9
C)  $17
D)  $30E) A) and B)
F) A) and C)

Question 20

Assume the market depicted in the graph is in equilibrium. If the market goes from equilibrium to having its price set at $18:

Accepted Answer

A)  the quantity exchanged will be 9,000.
B)  all consumers will gain surplus.
C)  the deadweight loss will be $2,250.
D)  the quantity exchanged will be 4,000.E) None of the above
F) B) and D)

Exam 5: Efficiency

Assume the market depicted in the graph is in equilibrium. If the market goes from equilibrium to having its price set at $18:

Correct Answer
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Correct Answer
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Suppose Sally purchases a pair of shoes for $45. Which of the following prices could represent Sally's willingness to pay for a pair of shoes?

Correct Answer
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Assume the market depicted in the graph is in equilibrium. If supply increases:

Correct Answer
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Correct Answer
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Assume the market depicted in the graph is in equilibrium. Which of the following statements is true?

Correct Answer
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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?

Correct Answer
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Correct Answer
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A buyer always wants to pay a price that is as _ as possible, but never _ than the buyer's willingness to pay.

Correct Answer
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Surplus refers to the difference between:

Correct Answer
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Assume the market depicted in the graph is in equilibrium. If the price is set below $6:

Correct Answer
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Assume the market depicted in the graph is in equilibrium. If its price is subsequently set at $12, deadweight loss will consist of area(s) :

Correct Answer
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In economics, the concept of surplus:

Correct Answer
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Assume the market depicted in the graph is in equilibrium. Consumer surplus consists of which area(s) ?

Correct Answer
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Correct Answer
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Assume the market depicted in the graph is in equilibrium. What is producer surplus?

Correct Answer
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If Ayana's willingness to pay for a sweater is $37, which of the following prices would she have to observe in the market in order to buy a sweater?

Correct Answer
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A seller's willingness to sell:

Correct Answer
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When the market price is set below the equilibrium price:

Correct Answer
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Suppose Miguel wishes to buy a baseball glove. He observes that the market price of a glove is $43 and decides not to buy one. Which of the following prices could represent Miguel's willingness to pay for a baseball glove?

Correct Answer
verified

Exam 5: Efficiency

Assume the market depicted in the graph is in equilibrium. If the market goes from equilibrium to having its price set at $18:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose Sally purchases a pair of shoes for $45. Which of the following prices could represent Sally's willingness to pay for a pair of shoes?

Correct AnswerverifiedShow Answer

Assume the market depicted in the graph is in equilibrium. If supply increases:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assume the market depicted in the graph is in equilibrium. Which of the following statements is true?

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A buyer always wants to pay a price that is as _____ as possible, but never _____ than the buyer's willingness to pay.

Correct AnswerverifiedShow Answer

Surplus refers to the difference between:

Correct AnswerverifiedShow Answer

Assume the market depicted in the graph is in equilibrium. If the price is set below $6:

Correct AnswerverifiedShow Answer

Assume the market depicted in the graph is in equilibrium. If its price is subsequently set at $12, deadweight loss will consist of area(s) :

Correct AnswerverifiedShow Answer

In economics, the concept of surplus:

Correct AnswerverifiedShow Answer

Assume the market depicted in the graph is in equilibrium. Consumer surplus consists of which area(s) ?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assume the market depicted in the graph is in equilibrium. What is producer surplus?

Correct AnswerverifiedShow Answer

If Ayana's willingness to pay for a sweater is $37, which of the following prices would she have to observe in the market in order to buy a sweater?

Correct AnswerverifiedShow Answer

A seller's willingness to sell:

Correct AnswerverifiedShow Answer

When the market price is set below the equilibrium price:

Correct AnswerverifiedShow Answer

Suppose Miguel wishes to buy a baseball glove. He observes that the market price of a glove is $43 and decides not to buy one. Which of the following prices could represent Miguel's willingness to pay for a baseball glove?

Correct AnswerverifiedShow Answer

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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?

Correct Answer
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Correct Answer
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A buyer always wants to pay a price that is as _ as possible, but never _ than the buyer's willingness to pay.

Correct Answer
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Correct Answer
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Correct Answer
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