Consumers, Producers, and the Efficiency of Markets 1773
105.
Which of the following will cause a decrease in consumer surplus?
a.
an increase in the number of sellers of the good
b.
a decrease in the production cost of the good
c.
sellers expect the price of the good to be lower next month
d.
the imposition of a binding price floor in the market
106.
When there is a technological advance in the pork industry, consumer surplus in that market will
a.
increase.
b.
decrease.
c.
not change, since technology affects producers and not consumers.
d.
not change, since consumers’ willingness to pay is unaffected by the technological advance.
107.
If the price of oak lumber increases, what happens to consumer surplus in the market for oak
cabinets?
a.
Consumer surplus increases.
b.
Consumer surplus decreases.
c.
Consumer surplus will not change consumer surplus; only producer surplus changes.
d.
Consumer surplus depends on what event led to the increase in the price of oak lumber.
108.
Which of the following is not true when the price of a good or service falls?
a.
Buyers who were already buying the good or service are better off.
b.
Some new buyers, who are now willing to buy, enter the market.
c.
The total consumer surplus in the market increases.
d.
The total value of purchases before and after the price change is the same.
109.
When the demand for a good increases and the supply of the good remains unchanged, consumer
surplus
a.
decreases.
b.
is unchanged.
c.
increases.
d.
may increase, decrease, or remain unchanged.
110.
Suppose televisions are a normal good and buyers of televisions experience a decrease in
income. As a result,
consumer surplus in the television market
a.
decreases.
b.
is unchanged.
c.
increases.
d.
may increase, decrease, or remain unchanged.
111.
Motor oil and gasoline are complements. If the price of motor oil increases, consumer surplus in
the gasoline market
a.
decreases.
b.
is unchanged.
c.
increases.
d.
may increase, decrease, or remain unchanged.
112.
Dallas buys strawberries, and he would be willing to pay more than he now pays. Suppose that
Dallas has a change
in his tastes such that he values strawberries more than before. If the
market price is the same as before, then
a.
Dallas’s consumer surplus would be unaffected.
b.
Dallas’s consumer surplus would increase.
c.
Dallas’s consumer surplus would decrease.
d.
Dallas would be wise to buy fewer strawberries than before.
Consumers, Producers, and the Efficiency of Markets 1777
Figure 7-1
113.
Refer to Figure 7-1. If the price of the good is $250, then consumer surplus amounts to
a. $50.
b. $100.
c. $150.
d. $200.
114.
Refer to Figure 7-1. If the price of the good is $150, then consumer surplus amounts to
a. $150.
b. $200.
c. $250.
d. $300.
115.
Refer to Figure 7-1. If the price of the good is $50, then consumer surplus amounts to
a. $400.
b. $500.
c. $600.
d. $750.
116.
Refer to Figure 7-1. If the price of the good is $200, then
a.
consumer surplus is $150.
b.
consumer surplus is $650.
c.
producer surplus is $650.
d.
producer surplus is $750.
117.
Refer to Figure 7-1. The value of the good to consumers minus the cost of the good to
consumers amounts to $325 if the price of the good is
a. $200.
b. $150.
c. $125
.
d. $100.
1780 Consumers, Producers, and the Efficiency of Markets
Figure 7-2
118.
Refer to Figure 7-2. If the price of the good is $100, then consumer surplus amounts to
a. $50.
b. $75.
c. $100.
d. $125.
119.
Refer to Figure 7-2. If the price of the good is $80, then consumer surplus amounts to
a. $110.
b. $135.
c. $160
.
d. $185.
Figure 7-3
120.
Refer to Figure 7-3. When the price is P1, consumer surplus is
a.
A.
b.
A+B.
c.
A+B+C.
d.
A+B+D.
121.
Refer to Figure 7-3. When the price is P2, consumer surplus is
a.
A.
b.
B.
c.
A+B.
d.
A+B+C.
122.
Refer to Figure 7-3. When the price rises from P1 to P2, consumer surplus
a.
increases by an amount equal to A.
b.
decreases by an amount equal to B+C.
c.
increases by an amount equal to B+C.
d.
decreases by an amount equal to C.
123.
Refer to Figure 7-3. Area C represents the
a.
decrease in consumer surplus that results from a downward-sloping demand curve.
b.
consumer surplus to new consumers who enter the market when the price falls from P2 to P1.
c.
increase in producer surplus when quantity sold increases from Q2 to Q1.
d.
decrease in consumer surplus to each consumer in the market when the price increases from
P1 to P2.
124.
Refer to Figure 7-3. When the price rises from P1 to P2, which of the following statements is
not true?
a.
The buyers who still buy the good are worse off because they now pay more.
b.
Some buyers leave the market because they are not willing to buy the good at the higher price.
c.
Buyers place a higher value on the good after the price increase.
d.
Consumer surplus in the market falls.
Figure 7-4
125.
Refer to Figure 7-4. Which area represents consumer surplus at a price of P1?
a.
BDF
b.
AFG
c.
ABDG
d.
ABC
126.
Refer to Figure 7-4. Which area represents consumer surplus at a price of P2?
a.
BDF
b.
AFG
c.
ABDG
d.
ABC
127.
Refer to Figure 7-4. Which area represents the increase in consumer surplus when the price
falls from P1 to P2?
a.
BDF
b.
AFG
c.
ABC
d.
ABDG
128.
Refer to Figure 7-4. When the price falls from P1 to P2, which area represents the increase in
consumer surplus
to existing buyers?
a.
BDF
b.
AFG
c.
BCGD
d.
ABC
129.
Refer to Figure 7-4. When the price falls from P1 to P2, which area represents the increase in
consumer surplus
to new buyers entering the market?
a.
BDF
b.
AFG
c.
BCGD
d.
ABC
Figure 7-5
130.
Refer to Figure 7-5. If the price of the good is $6, then consumer surplus is
a. $16.
b.
$24.
c.
$30.
d.
$36.
131.
Refer to Figure 7-5. If the price of the good is $12, then consumer surplus is
a. $9.
b.
$11.
c.
$13.
d.
$16.
Consumers, Producers, and the Efficiency of Markets 1789
Figure 7-6
132.
Refer to Figure 7-6. At the equilibrium price, consumer surplus is
a. $1,600.
b. $800.
c. $1,400.
d. $700.
133.
Refer to Figure 7-6. If the government imposes a price floor of $110 in this market, then
consumer surplus will
decrease by
a. $200.
b. $400.
c. $600.
d. $800.
Consumers, Producers, and the Efficiency of Markets 1791
Figure 7-7
134.
Refer to Figure 7-7. What is the consumer surplus if the price is $100?
a. $2,500
b. $5,000
c. $10,000
d. $20,000
135.
Refer to Figure 7-7. What happens to the consumer surplus if the price rises from $100 to
$150?
a.
The new consumer surplus is half of the original consumer surplus.
b.
The new consumer surplus is 25 percent of the original consumer surplus.
c.
The new consumer surplus is double the original consumer surplus.
d.
The new consumer surplus is triple the original consumer surplus.
1792 Consumers, Producers, and the Efficiency of Markets
Figure 7-8
136.
Refer to Figure 7-8. At the equilibrium price, consumer surplus is
a. $1,050.
b. $1,225.
c. $1,575.
d. $2,450.