Question 1

Assume the market depicted in the graph is in equilibrium. If the price is subsequently set at $22, which of the following statements is true? I. Some producers will gain surplus.
II)  Some surplus will be transferred from producers to consumers.
III)  Total surplus will fall.

Accepted Answer

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

Question 2

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 $10, which of the following statements is true?

Accepted Answer

A)   Only House Depot would have positive surplus by supplying hammers to the market.
B)   Only House Depot and Lace Hardware would have positive surplus by supplying hammers to the market.
C)   House Depot, Lace Hardware, and Bob's Hardware would all supply hammers to the market, but Bob's would have negative surplus.
D)   Only House Depot and Bob's Hardware would supply hammers to the market.E) None of the above
F) A) and B)

Question 3

Assume a market price is set artificially low. In other words, the price is set below the equilibrium price. How will this affect the market?

Accepted Answer

A)   Every producer loses surplus, and it all gets transferred to consumers.
B)   Some producers drop out of the market, and those left lose some surplus.
C)   Every consumer gains surplus, due to the lower price now being charged.
D)   None of these are correct.E) A) and D)
F) A) and B)

Question 4

The creation of markets that were previously missing:

Accepted Answer

A)   can create winners and losers.
B)   increases total surplus.
C)   benefits those who interact in the new markets.
D)   All of these are correct.E) None of the above
F) All of the above

Question 5

When a perfectly competitive, well-functioning market is in equilibrium:

Accepted Answer

A)   total surplus is maximized.
B)   the market is efficient.
C)   deadweight loss is zero.
D)   All of these are correct.E) A) and B)
F) B) and C)

Question 6

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 $9 to $13, producer surplus would:

Accepted Answer

A)   increase for each producer.
B)   increase only for House Depot.
C)   remain unchanged for Bob's Hardware.
D)   increase by $4 for Lace Hardware.E) A) and B)
F) A) and C)

Question 7

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

Accepted Answer

A)   $40
B)   $64
C)   $80
D)   $160E) All of the above
F) C) and D)

Question 8

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

Accepted Answer

A)   $360
B)   $40
C)   $160
D)   $120E) None of the above
F) A) and B)

Question 9

Each seller's opportunity costs are:

Accepted Answer

A)   determined monetarily, which is why they can never be zero.
B)   determined by a number of factors, none of which is monetary.
C)   determined by a number of factors, including monetary considerations.
D)   less than the monetary costs of manufacturing the good or service.E) B) and C)
F) A) and B)

Question 10

Suppose the market for kidneys is depicted in the graph shown.  Initially, kidneys are exchanged by donations only (price = $0) . If the government decides to legalize kidneys sales and the market reaches equilibrium, then:

Accepted Answer

A)   total surplus will increase.
B)   consumer surplus will remain the same.
C)   producer surplus will remain the same.
D)   a shortage of kidneys will arise.E) C) and D)
F) A) and B)

Question 11

1) . If the supply curve shifts to S2, and a new equilibrium is reached, which of the following is true? A)  Producer surplus increases and total surplus increases. B)  Producer surplus decreases and total surplus increases. C)  Producer surplus increases and total surplus decreases. D)  Producer surplus decreases and total surplus decreases." 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)   Producer surplus increases and total surplus increases.
B)   Producer surplus decreases and total surplus increases.
C)   Producer surplus increases and total surplus decreases.
D)   Producer surplus decreases and total surplus decreases.E) C) and D)
F) B) and D)

Question 12

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 is $300, who will participate in the market?

Accepted Answer

A)   Only Martina, Javier, and Kamal will participate
B)   Only Kamal and Lina will participate
C)   Only Martina and Javier will participate
D)   Only Lina will participateE) A) and D)
F) A) and C)

Question 13

The maximum price that a buyer would be willing to pay for a good or service is also called:

Accepted Answer

A)   willingness to pay.
B)   the buyer-max price.
C)   the reserved max price.
D)   opportunity cost.E) A) and B)
F) B) and D)

Question 14

Assume a market has an equilibrium price of $7. If the market price is set at $3, which of the following statements is true?

Accepted Answer

A)   Some surplus is transferred from consumers to producers, but total surplus falls.
B)   All surplus is transferred from producers to consumers, and total surplus stays the same.
C)   Some surplus is transferred from producers to consumers, but total surplus falls.
D)   Some surplus is transferred from consumers to producers, causing total surplus to increase.E) None of the above
F) All of the above

Question 15

Suppose the market for kidneys is depicted in the graph shown.  If the government allows the buying and selling of kidneys, _____ kidneys will be sold at a price of _____ per kidneys.

Accepted Answer

A)   900; $0
B)   2,000; $1,200
C)   900; $1,500
D)   0; $0E) B) and C)
F) A) and B)

Question 16

Suppose Sam's opportunity cost of producing a sweater is $37. Which of the following prices would he have to observe in the market in order to sell a sweater?

Accepted Answer

A)   $37
B)   $37.01
C)   $50
D)   Sam would sell a sweater at any of these prices.E) All of the above
F) A) and B)

Question 17

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) B) and D)

Question 18

1) . If the supply curve shifts to S2, and a new equilibrium is reached, which of the following is true? A)  Total surplus decreases by $90. B)  Total surplus decreases by $10. C)  Total surplus increases by $250. D)  Total surplus increases by $90." 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)   Total surplus decreases by $90.
B)   Total surplus decreases by $10.
C)   Total surplus increases by $250.
D)   Total surplus increases by $90.E) B) and D)
F) A) and D)

Question 19

At prices above a consumer's willingness to pay:

Accepted Answer

A)   the opportunity cost of buying the good is less than the benefit received from having the good.
B)   the opportunity cost of buying the good is greater than the benefit received from having the good.
C)   the buyer will purchase the good and attempt to resell after receiving due benefit.
D)   the buyer needs more income in order to buy the good.E) B) and C)
F) A) and D)

Question 20

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 $9 to $12, total producer surplus would increase by:

Accepted Answer

A)   $1.
B)   $3.
C)   $5.
D)   $7.E) A) and B)
F) A) and C)

Exam 5: Efficiency

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

Correct Answer
verified

Assume the market depicted in the graph is in equilibrium. If the price is subsequently set at $22, which of the following statements is true? I. Some producers will gain surplus. II) Some surplus will be transferred from producers to consumers. III) Total surplus will fall.

Correct Answer
verified

At prices above a consumer's willingness to pay:

Correct Answer
verified

Assume a market price is set artificially low. In other words, the price is set below the equilibrium price. How will this affect the market?

Correct Answer
verified

Suppose Sam's opportunity cost of producing a sweater is $37. Which of the following prices would he have to observe in the market in order to sell a sweater?

Correct Answer
verified

The creation of markets that were previously missing:

Correct Answer
verified

Assume a market has an equilibrium price of $7. If the market price is set at $3, which of the following statements is true?

Correct Answer
verified

Suppose the market for kidneys is depicted in the graph shown. Initially, kidneys are exchanged by donations only (price = $0) . If the government decides to legalize kidneys sales and the market reaches equilibrium, then:

Correct Answer
verified

When a perfectly competitive, well-functioning market is in equilibrium:

Correct Answer
verified

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
verified

Correct Answer
verified

The maximum price that a buyer would be willing to pay for a good or service is also called:

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

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
verified

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
verified

Each seller's opportunity costs are:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Suppose the market for kidneys is depicted in the graph shown. If the government allows the buying and selling of kidneys, _ kidneys will be sold at a price of _ per kidneys.

Correct Answer
verified

Exam 5: Efficiency

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

Correct AnswerverifiedShow Answer

Assume the market depicted in the graph is in equilibrium. If the price is subsequently set at $22, which of the following statements is true? I. Some producers will gain surplus. II) Some surplus will be transferred from producers to consumers. III) Total surplus will fall.

Correct AnswerverifiedShow Answer

At prices above a consumer's willingness to pay:

Correct AnswerverifiedShow Answer

Assume a market price is set artificially low. In other words, the price is set below the equilibrium price. How will this affect the market?

Correct AnswerverifiedShow Answer

Suppose Sam's opportunity cost of producing a sweater is $37. Which of the following prices would he have to observe in the market in order to sell a sweater?

Correct AnswerverifiedShow Answer

The creation of markets that were previously missing:

Correct AnswerverifiedShow Answer

Assume a market has an equilibrium price of $7. If the market price is set at $3, which of the following statements is true?

Correct AnswerverifiedShow Answer

Suppose the market for kidneys is depicted in the graph shown. Initially, kidneys are exchanged by donations only (price = $0) . If the government decides to legalize kidneys sales and the market reaches equilibrium, then:

Correct AnswerverifiedShow Answer

When a perfectly competitive, well-functioning market is in equilibrium:

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

The maximum price that a buyer would be willing to pay for a good or service is also called:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

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

Each seller's opportunity costs are:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose the market for kidneys is depicted in the graph shown. If the government allows the buying and selling of kidneys, _____ kidneys will be sold at a price of _____ per kidneys.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Suppose the market for kidneys is depicted in the graph shown. If the government allows the buying and selling of kidneys, _ kidneys will be sold at a price of _ per kidneys.

Correct Answer
verified