Econ 1B - Principles of Microeconomics » Spring 2023 » Chapter 4 Problem Set
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Question #1
The total surplus in a market is:
A.
the net benefit to consumers, defined as the excess of consumer surplus over producer surplus.
B.
the excess supply due to a price above the equilibrium price.
C.
the sum of consumer surplus and producer surplus.
D.
the surplus that accrues when a good is not scarce, defined as the total amount (if any) by which quantity supplied exceeds quantity demanded at a zero price.
Question #2
Coffee and tea are substitutes in consumption. If there is an increase in the price of coffee, assuming a positively sloped supply curve and a negatively sloped demand curve, total surplus in the tea market:
A.
will decrease.
B.
will increase.
C.
may change, but we cannot determine the change without more information.
D.
will not change.
Question #3
Which of the following is a key factor in the effectiveness of well-functioning markets?
A.
outcomes that are equitable for consumers and producers
B.
a significant degree of government intervention to maximize efficiency
C.
the role of the government to deliver economic signals to consumers and producers
D.
your right to use and dispose of your private property as you see fit
Question #4
Assume that the supply curve for corn is upward-sloping. In the market for corn, a primary input in the production of ethanol, total surplus _____ when the price of ethanol increases.
A.
The answer cannot be determined without information about the supply curve.
B.
decreases
C.
does not change
D.
increases
Question #5
Table: Willingness to Pay for Basketball Sneakers Consumer -- Willingess to Pay Jamichael -- $150 Corey -- 140 Rudy -- 120 Ray -- 100 Javon -- 80 The table Willingness to Pay for Basketball Sneakers shows each player's willingness to pay for basketball sneakers. Assume that each player wants to buy at most, one pair of sneakers. If the price of basketball sneakers is $180, how many pairs will be purchased?
A.
none
B.
one
C.
two
D.
three
Question #6
An increase in the consumer surplus in the market for milkshakes may result from a(n) _____ in the _____ of milkshakes.
A.
increase; price
B.
decrease; supply
C.
increase; supply
D.
decrease; demand
Question #7
Mark and Rasheed are at the bookstore buying new calculators for the semester. Mark is willing to pay $75 and Rasheed is willing to pay $100 for a graphing calculator. The price for a calculator at the bookstore is $65. How much is their total consumer surplus?
A.
$60
B.
$10
C.
$35
D.
$45
Question #8
Luis is willing to sell his pool table for no less than $600, but if he gets $840, the producer surplus Luis receives is:
A.
$840.
B.
$600.
C.
$240.
D.
$1,440.
Question #9
Table: Producer Surplus and Phantom Tickets Srudent -- Willingess to Sell Tim -- $ 1 Laura -- 30 Whitney -- 50 Ralph -- 100 Rick -- 150 The table Producer Surplus and Phantom Tickets shows the minimum price at which each of the students is willing to sell a ticket to Phantom of the Opera. Assume that each student has only one ticket to sell. If the price for Phantom tickets is $140 and there is no other market for tickets, total producer surplus for these five students is:
A.
$40.
B.
$110.
C.
$379.
D.
$139.
Question #10
If the supply curve of ice cream is upward-sloping and demand for it decreases, there will be _____ in producer surplus.
A.
an increase
B.
It's impossible to tell what will happen to producer surplus.
C.
a decrease
D.
no change
Question #11
We can measure total producer surplus for good X as:
A.
the area bounded by the supply curve for X and the two axes.
B.
the area below the supply curve for X and above the price of X.
C.
the area between the demand curve for X and the supply curve for X.
D.
the sum of the individual producer surpluses for all buyers of X.
Question #12
When a market is in equilibrium and there is no outside intervention to change the equilibrium price:
A.
inefficiency is maximized.
B.
no mutually beneficial trades are missed.
C.
some mutually beneficial trades may be missed.
D.
total surplus is minimized.
Question #13
If there is a decrease in demand, assuming a positively sloped supply curve and a negatively sloped demand curve, total surplus:
A.
will remain the same.
B.
will decrease.
C.
will increase.
D.
may change, but we can't tell how.
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