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

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Question 211

Multiple Choice

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Market power refers to the

A) side effects that may occur in a market.
B) government regulations imposed on the sellers in a market.
C) ability of market participants to influence price.
D) forces of supply and demand in determining equilibrium price.

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

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Question 212

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If the government imposes a binding price floor in a market,then the consumer surplus in that market will increase.

A) True
B) False

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Question 213

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Figure 7-3 -Refer to Figure 7-3.At the equilibrium price,producer surplus is

If Gina sells a shirt for $40,and her producer surplus from the sale is $32,her cost must have been

Figure 7-11 -Refer to Figure 7-11.At the equilibrium price,producer surplus is

Inefficiency exists in an economy when a good is

Scenario 7-1 Suppose market demand is given by the equation -Refer to Scenario 7-1.If the market equilibrium price rises from $10 to $15,what is the change in total consumer surplus in the market?

Figure 7-9 -Refer to Figure 7-9.If the supply curve is S and the demand curve shifts from D to D',what is the change in producer surplus?

Figure 7-20 -Refer to Figure 7-20.At equilibrium,total surplus is

Table 7-7 The following table represents the costs of five possible sellers. -Refer to Table 7-7.Who is a marginal seller when the price is $1,200?

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 7-4 -Refer to Figure 7-4.If the market equilibrium price falls from $120 to $80,how much consumer surplus do consumers entering the market after the price drop receive?

All else equal,what happens to consumer surplus if the price of a good increases?

Figure 7-4 -Refer to Figure 7-4.If the price of the good is $12,then consumer surplus is

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.Who experiences the largest loss of consumer surplus when the price of an orange increases from $0.70 to $1.40?

Consumer surplus in a market can be represented by the

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 $0.40,then

Figure 7-3 -Refer to Figure 7-3.Which area represents the increase in consumer surplus when the price falls from P1 to P2?

Table 7-7 The following table represents the costs of five possible sellers. -Refer to Table 7-7.If the market price is $900,the producer surplus in the market is

Figure 7-20 -Refer to Figure 7-20.If 6 units of the good are produced and sold,then