Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Consumers, Producers, and the Efficiency of Markets 1733
29. Refer to Table 7-2. If the market price is $3.80,
a. David’s consumer surplus is $4.70 and total consumer surplus for the five individuals is $9.50.
b. Megan’s consumer surplus is $1.70 and total consumer surplus for the five individuals is $9.80.
c. David, Laura, and Megan will be the only buyers of Vanilla Coke.
d. the demand curve for Vanilla Coke, taking the five individuals into account, is horizontal.
Table 7-3
The only four consumers in a market have the following willingness to pay for a good:
Buyer
Willingness to Pay
Carlos
$15
Quilana
$25
Wilbur
$35
Ming-la
$45
30. Refer to Table 7-3. If the market price for the good is $20, who will purchase the good?
a. Ming-la only
b. Carlos and Quilana only
c. Quilana and Wilbur only
d. Quilana, Wilbur, and Ming-la only
31. Refer to Table 7-3. If there is only one unit of the good and if the buyers bid against each other
for the right to purchase it, then the good will sell for
a. $15 or slightly less.
b. $25 or slightly more.
c. $35 or slightly more.
1734 Consumers, Producers, and the Efficiency of Markets
d. $45 or slightly less.
32. Refer to Table 7-3. If there is only one unit of the good and if the buyers bid against each other
for the right to purchase it, then the consumer surplus will be
a. $0 or slightly more.
b. $10 or slightly less.
c. $30 or slightly more.
d. $45 or slightly less.
33. Refer to Table 7-3. If the price is $20, then consumer surplus in the market is
a. $20, and Wilbur and Ming-la purchase the good.
b. $45, and Carlos and Quilana purchase the good.
c. $45, and Quilana, Wilbur, and Ming-la purchase the good.
d. $55, and Carlos, Wilbur, and Ming-la purchase the good.
Consumers, Producers, and the Efficiency of Markets 1735
34. Refer to Table 7-3. Who experiences the largest loss of consumer surplus when the price of
the good increases from $20 to $22?
a. Quilana
b. Wilbur
c. Ming-la
d. All three buyers experience the same loss of consumer surplus.
Table 7-4
The numbers in Table 7-1 reveal the maximum willingness to pay for a ticket to a Chicago Cubs
vs. St. Louis Cardinal’s baseball game at Wrigley Field.
Buyer
Willingness to Pay
Jennifer
$10
Bryce
$15
Dan
$20
David
$25
Ken
$50
Lisa
$60
35. Refer to Table 7-4. If you have a ticket that you sell to the group in an auction, what will be the
selling price?
a. slightly more than $20.
b. slightly more than $25.
c. slightly more than $50.
d. slightly more than $60.
1736 Consumers, Producers, and the Efficiency of Markets
36. Refer to Table 7-4. If you have a ticket that you sell to the group in an auction, who will buy the
ticket?
a. Dan
b. David
c. Ken
d. Lisa
37. Refer to Table 7-4. If tickets sell for $40 each, then what is the total consumer surplus in the
market?
a. $90.
b. $30.
c. $70.
d. $110.
Consumers, Producers, and the Efficiency of Markets 1737
38. Refer to Table 7-4. If tickets sell for $25 each, then what is the total consumer surplus in the
market?
a. $25
b. $35
c. $60
d. $110
39. Refer to Table 7-4. If you have two (essentially) identical tickets that you sell to the group in an
auction, what will be the selling price for each ticket?
a.
$21
b.
$26
c.
$51
d.
$61
1738 Consumers, Producers, and the Efficiency of Markets
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 Allison, Bob, and Charisse are the only three buyers of
oranges, and only three oranges can be supplied per day.
First Orange
Second Orange
Third Orange
Allison
$2.00
$1.50
$0.75
Bob
$1.50
$1.00
$0.60
Charisse
$0.75
$0.25
$0
40. Refer to Table 7-5. If the market price of an orange is $0.90, then the market quantity of
oranges demanded per day is
a. 5.
b. 2.
c. 3.
d. 4.
Consumers, Producers, and the Efficiency of Markets 1739
41. Refer to Table 7-5. If the market price of an orange is $0.70, then the market quantity of
oranges demanded per day is
a. 5.
b. 6.
c. 4.
d. 7.
42. Refer to Table 7-5. The market quantity of oranges demanded per day is exactly 7 if the price
of an orange, P, satisfies
a. $0.60 < P < $0.75.
b. $0.60 < P < $2.00.
c. $0.25 < P < $0.75.
d. $0.25 < P < $0.60.
1740 Consumers, Producers, and the Efficiency of Markets
43. Refer to Table 7-5. If the market price of an orange is $0.65, then consumer surplus amounts to
a. $3.90.
b. $6.75.
c. $3.60.
d. $7.50.
44. Refer to Table 7-5. If the market price of an orange is $0.40, then
a. 6 oranges are demanded per day, and consumer surplus amounts to $4.95.
b. 6 oranges are demanded per day, and consumer surplus amounts to $5.10.
c. 7 oranges are demanded per day, and consumer surplus amounts to $5.30.
d. 7 oranges are demanded per day, and consumer surplus amounts to $5.15.
Consumers, Producers, and the Efficiency of Markets 1741
45. Refer to Table 7-5. If the market price of an orange increases from $0.80 to $1.05, then
consumer surplus
a. increases by $0.75.
b. decreases by $0.95.
c. decreases by $0.75.
d. decreases by $1.00.
46. Refer to Table 7-5. If the market price of an orange increases from $0.70 to $1.40, then
consumer surplus
a. increases by $2.60.
b. decreases by $0.70.
c. decreases by $2.50.
d. decreases by $2.60.
1742 Consumers, Producers, and the Efficiency of Markets
47. 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?
a. Allison
b. Bob
c. Charisse
d. All three individuals experience the same loss of consumer surplus.
48. Refer to Table 7-5. Who experiences the largest gain in consumer surplus when the price of an
orange decreases from $1.05 to $0.75?
a. Allison
b. Bob
c. Charisse
d. Allison and Bob experience the same gain in consumer surplus, and Charisse’s gain is zero.
Consumers, Producers, and the Efficiency of Markets 1743
49. Refer to Table 7-5. Which of the following statements is correct?
a. Neither Bob’s consumer surplus nor Charisse’s consumer surplus can exceed Allison’s
consumer surplus, for any price of an orange.
b. All three individuals will buy at least one orange only if the price of an orange is less than $0.25.
c. If the price of an orange is $0.60, then consumer surplus is $4.90.
d. All of the above are correct.
Table 7-6
For each of three potential buyers of apples, the table displays the willingness to pay for the first
three apples of the day. Assume Xavier, Yadier, and Zavi are the only three buyers of apples, and
only three apples can be supplied per day.
First Apple
Second Apple
Third Apple
Xavier
$1.75
$1.55
$1.15
Yadier
$1.50
$1.25
$0.75
Zavi
$1.30
$1.10
$0.70
50. Refer to Table 7-6. If the market price of an apple is $1.40, then the market quantity of apples
demanded per day is
a. 1.
b. 2.
c. 3.
d. 4.
1744 Consumers, Producers, and the Efficiency of Markets
51. Refer to Table 7-6. If the market price of an apple is $1.40, then consumer surplus amounts to
a. $0.60.
b. $1.20.
c.$1.40.
d. $3.40
52. Refer to Table 7-6. If the market price of an apple increases from $1.40 to $1.60, then
consumer surplus
a. decreases by $0.15.
b. decreases by $0.30.
c. decreases by $0.45.
d. increases by $0.15.
Table 7-7
Buyer
Willingness to Pay
Michael
$500
Earvin
$400
Larry
$350
Charles
$300
Consumers, Producers, and the Efficiency of Markets 1745
53. Refer to Table 7-7. You have an extra ticket to the Midwest Regional Sweet 16 game in the
men’s NCAA basketball tournament. The table shows the willingness to pay of the four potential
buyers in the market for a ticket to the game. You hold an auction to sell the ticket. Who makes
the winning bid, and what does he offer to pay for the ticket?
a. Michael; $501
b. Michael; more than $400 but less than or equal to $500
c. Earvin; $400
d. Earvin; more than $350 but less than or equal to $400
54. Refer to Table 7-7. You have an extra ticket to the Midwest Regional Sweet 16 game in the
men’s NCAA basketball tournament. The table shows the willingness to pay of the four potential
buyers in the market for a ticket to the game. You hold an auction to sell the ticket. Michael bids
$410 for the ticket, and you sell him the ticket. What is his consumer surplus?
a. $410
b. $90
c. $10
d.
0
1746 Consumers, Producers, and the Efficiency of Markets
55. Refer to Table 7-7. You have two essentially identical extra tickets to the Midwest Regional
Sweet 16 game in the men’s NCAA basketball tournament. The table shows the willingness to
pay of the four potential buyers in the market for a ticket to the game. You hold an auction to sell
the two tickets. Who makes the winning bids, and what do they offer to pay for the tickets?
a. Michael and Earvin; more than $350 but less than or equal to $400
b. Michael and Earvin; more than $400 but less than or equal to $500
c. Earvin and Larry; more than $300 but less than or equal to $350
d. Larry and Charles; less than $300
56. Refer to Table 7-7. You have two essentially identical extra tickets to the Midwest Regional
Sweet 16 game in the men’s NCAA basketball tournament. The table shows the willingness to
pay of the four potential buyers in the market for a ticket to the game. You hold an auction to sell
the two tickets. Michael and Earvin each offer to pay
$360 for a ticket, and you sell them the two tickets. What is the total consumer surplus in the
market?
a. $720
b. $180
c. $140
d. $40
Consumers, Producers, and the Efficiency of Markets 1747
57. Refer to Table 7-7. You have four essentially identical extra tickets to the Midwest Regional
Sweet 16 game in the men’s NCAA basketball tournament. The table shows the willingness to
pay of the four potential buyers in the market for a ticket to the game. You offer to sell the
tickets for $400. How many tickets do you sell, and what is the total consumer surplus in the
market?
a. one ticket; $100
b. two tickets; $100
c. two tickets; $0
d. three tickets; $0
58. Refer to Table 7-7. You have four essentially identical extra tickets to the Midwest Regional
Sweet 16 game in the men’s NCAA basketball tournament. The table shows the willingness to
pay of the four potential buyers in the market for a ticket to the game. You offer to sell the
tickets for $325. How many tickets do you sell, and what is the total consumer surplus in the
market?
a. one ticket; $175
b. two tickets; $225
c. three tickets; $225
d. three tickets; $275
1748 Consumers, Producers, and the Efficiency of Markets
59. Refer to Table 7-7. You are selling extra tickets to the Midwest Regional Sweet 16 game in the
men’s NCAA basketball tournament. The table shows the willingness to pay of the four potential
buyers in the market for a ticket to the game. Which of the following graphs represents the
market demand curve?
a.
b.
c.
d.
Consumers, Producers, and the Efficiency of Markets 1749
Table 7-9
During the last two days, Chad purchased a latte from two different stores. The table below
shows Chad’s willingness to pay on each day and his consumer surplus from each purchase.
Chad’s Willingness to Pay
Chad’s Consumer Surplus
First Day
$5.00
$1.25
Second Day
$4.00
$0.75
60. Refer to Table 7-9. The price that Chad paid for a latte on the first day is
a. $3.75.
b. $6.25.
c. $5.00.
d. $5.50.
61. Refer to Table 7-9. The price that Chad paid for a latte on the second day is
a. $0.25 less than the amount he paid on the first day.
b. $1.00 less than the amount he paid on the first day.
c. $1.50 less than the amount he paid on the first day.
d. $0.50 less than the amount he paid on the first day.
1750 Consumers, Producers, and the Efficiency of Markets
Table 7-10
The only four consumers in a market have the following willingness to pay for a good:
Buyer Willingness to Pay
Ashleigh
$12
Barb
$15
Carolyn
$19
Danita
$27
62. Refer to Table 7-10. If the market price for the good is $20, who will purchase the good?
a. Danita only
b. Carolyn and Danita only
c. Ashleigh, Barb, and Carolyn only
d. All four buyers would purchase the good.
Consumers, Producers, and the Efficiency of Markets 1751
63. Refer to Table 7-10. If there is only one unit of the good available for purchase, and if the
buyers bid against each other for the right to purchase it, then the good will sell for
a. $12 or slightly less
b. $15 or slightly more
c. $19 or slightly more
d. $27 or slightly less
64. Refer to Table 7-10. If there is only one unit of the good available for purchase, and if the
buyers bid against each other for the right to purchase it, then the consumer surplus will be
a. $0 or slightly more.
b. $3 or slightly less.
c. $4 or slightly more.
d. $8 or slightly less.
1752 Consumers, Producers, and the Efficiency of Markets
65. You are offered a free ticket to see the Chicago Cubs play the Chicago White Sox at Wrigley
Field. Assume the ticket has no resale value. Willie Nelson is performing on the same night, and
his concert is your next-best alternative activity. Tickets to see Willie Nelson cost $40. On any
given day, you would be willing to pay up to $50 to see and hear Willie Nelson perform. Assume
there are no other costs of seeing either event. Based on this information, at a minimum, how
much would you have to value seeing the Cubs play the White Sox to accept the ticket and go to
the game?
a. $0
b. $10
c. $40
d. $50
66. A drought in California destroys many red grapes. As a result of the drought, the consumer
surplus in the market for red grapes
a. increases, and the consumer surplus in the market for red wine increases.
b. increases, and the consumer surplus in the market for red wine decreases.
c. decreases, and the consumer surplus in the market for red wine increases.
d. decreases, and the consumer surplus in the market for red wine decreases.
