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Consumers, Producers, and the Efficiency of Markets 1813
Table 7-12
The only four producers in a market have the following costs:
Seller
Cost
Evan
$50
Selena
$100
Angie
$150
Kris
$200
34. Refer to Table 7-12. If the sellers bid against each other for the right to sell the good to a
consumer, then the good will sell for
a. $50 or slightly more.
b. $100 or slightly less.
c. $150 or slightly less.
d. $200 or slightly more.
35. Refer to Table 7-12. If the sellers bid against each other for the right to sell the good to a
consumer, then the producer surplus will be
a. $0 or slightly more.
b. $50 or slightly less.
c. $150 or slightly less.
d. $200 or slightly more.
1814 Consumers, Producers, and the Efficiency of Markets
36. Refer to Table 7-12. If Evan, Selena, and Angie sell the good, and the resulting producer surplus
is $300, then the price must have been
a. $200.
b. $300.
c. $450.
d. $600.
37. Refer to Table 7-12. If Evan, Selena, Angie, and Kris sell the good, and the resulting producer
surplus is $700, then the price must have been
a. $200.
b. $300.
c. $500.
d. $700.
Consumers, Producers, and the Efficiency of Markets 1815
Table 7-13
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
Seller
Cost
Marcia
$200
Jan
$250
Cindy
$350
Greg
$400
Peter
$700
Bobby
$800
38. Refer to Table 7-13. You wish to purchase 10 piano lessons, so you take bids from each of the
sellers. You will not accept a bid below a seller’s cost because you are concerned that the seller
will not provide all 10 lessons. What bid will you accept?
a. $351
b. $251
c. $249
d. $199
1816 Consumers, Producers, and the Efficiency of Markets
39. Refer to Table 7-13. You wish to purchase 10 piano lessons for yourself and for your brother,
so you take bids from each of the sellers. You will take lessons at the same time, so one teacher
cannot provide lessons to both of you. You must pay the same price for both sets of lessons, and
you will not accept a bid below a seller’s cost because you are concerned that the seller will not
provide all 10 lessons. What bid will you accept?
a. $351
b. $349
c. $201
d. $199
40. Refer to Table 7-13. The equilibrium market price for 10 piano lessons is $400. What is the total
producer surplus in the market?
a. $0
b. $300
c. $400
d. $700
Consumers, Producers, and the Efficiency of Markets 1817
41. Refer to Table 7-13. The equilibrium market price for 10 piano lessons is $300. What is the total
producer surplus in the market?
a.
$50
b.
$150
c.
$1,050
d.
$1,500
42. Refer to Table 7-13. You wish to purchase 10 piano lessons, so you take bids from each of the
sellers. The bids are required to be rounded to the nearest dollar. You will not accept a bid below
a seller’s cost because you are concerned that the seller will not provide all 10 lessons. Your
parents have given you $450 to spend on piano lessons. You believe that the sellers with higher
opportunity costs offer higher quality lessons. You want the highest quality lessons that you can
afford, but you can spend any remaining money on dinner with friends. From whom will you take
lessons, and how much money will you spend?
a. Peter; $450
b. Cindy; $450
c. Greg; $401
d. Cindy; $401
1818 Consumers, Producers, and the Efficiency of Markets
Table 7-14
The only four producers in a market have the following costs:
Seller
Cost
Abbey
$30
Bev
$40
Carl
$55
Dale
$65
43. Refer to Table 7-14. If the sellers bid against each other for the right to sell the good to a single
consumer, then the good will sell for
a. $30 or slightly more.
b. $40 or slightly less.
c. $55 or slightly less.
d. $65 or slightly less.
44. Refer to Table 7-14. If the sellers bid against each other for the right to sell the good to a single
consumer, then the producer surplus will be
a. $0 or slightly more.
b. $5 or slightly less.
c. $10 or slightly less.
d. $25 or slightly less.
Consumers, Producers, and the Efficiency of Markets 1819
45. Refer to Table 7-14. If Abbey, Bev, and Carl sell the good, and the resulting producer surplus is
$55 altogether, then the price must have been
a. $40.
b. $50.
c. $60.
d. $70.
Table 7-15
Seller
Cost
LeBron
$700
Kobe
$600
Kevin
$450
Steve
$400
46. Refer to Table 7-15. You want to hire a professional photographer to take pictures of your
family. The table shows the costs of the four potential sellers in the local photography market.
You take bids from the sellers. Who offers the winning bid, and what does he offer to charge for
the photography session?
a. Steve; more than $400 but less than $450
b. Steve; $399
c. LeBron; more than $700
d. LeBron; more than $600 but less than $700
1820 Consumers, Producers, and the Efficiency of Markets
47. Refer to Table 7-15. You and your best friend want to hire a professional photographer to take
pictures of your two families. The table shows the costs of the four potential sellers in the local
photography market. You and your friend take bids from the sellers. Who offers the two winning
bids, and what do they offer to charge for the photography sessions?
a. LeBron and Kobe; more than $450 but less than $600
b. Kevin and Steve; more than $450 but less than $600
c. LeBron and Kobe; more than $700
d. Kevin and Steve; less than $400
48. Refer to Table 7-15. You want to hire a professional photographer to take pictures of your
family. The table shows the costs of the four potential sellers in the local photography market.
You hire Kevin for a price of $500. What is his producer surplus?
a.
$500
b.
$150
c.
$100
d.
$50
Consumers, Producers, and the Efficiency of Markets 1821
49. Refer to Table 7-15. You and your best friend want to hire a professional photographer to take
pictures of your two families. The table shows the costs of the four potential sellers in the local
photography market. You and your friend agree to offer $500 for each session. Who accepts the
offer, and what is the total producer surplus in the market?
a. LeBron and Kobe; $500
b. Kevin and Steve; $500
c. LeBron and Kobe; $300
d. Kevin and Steve; $150
50. Refer to Table 7-15. You want to hire a professional photographer to take pictures of your
family. The table shows the costs of the four potential sellers in the local photography market.
Which of the following graphs represents the market supply curve?
a.
b.
c.
d.
1822 Consumers, Producers, and the Efficiency of Markets
Figure 7-9
51. Refer to Figure 7-9. If the price of the good is $9.50, then producer surplus is
a. $3.00.
b. $6.50.
c. $10.50.
d. $8.50.
Consumers, Producers, and the Efficiency of Markets 1823
52. Refer to Figure 7-9. If the price of the good is $14, then producer surplus is
a. $19.50.
b. $22.50.
c. $20.50.
d. $25.00.
53. Refer to Figure 7-9. If producer surplus is $19, then the price of the good is
a. $11.50.
b. $14.50.
c. $13.50.
d. $9.75.
1824 Consumers, Producers, and the Efficiency of Markets
Figure 7-10
54. Refer to Figure 7-10. Which area represents producer surplus when the price is P1?
a. BCG
b. ACH
c. ABGD
d. DGH
Consumers, Producers, and the Efficiency of Markets 1825
55. Refer to Figure 7-10. Which area represents producer surplus when the price is P2?
a. BCG
b. ACH
c. ABGD
d. AHGB
56. Refer to Figure 7-10. Which area represents the increase in producer surplus when the price
rises from P1 to P2?
a. BCG
b. ACH
c. ABGD
d. AHGB
1826 Consumers, Producers, and the Efficiency of Markets
57. Refer to Figure 7-10. When the price rises from P1 to P2, which area represents the increase in
producer surplus to existing producers?
a. BCG
b. ACH
c. DGH
d. ABGD
58. Refer to Figure 7-10. Which area represents the increase in producer surplus when the price
rises from P1 to P2 due to new producers entering the market?
a. BCG
b. ACH
c. DGH
d. AHGB
Consumers, Producers, and the Efficiency of Markets 1827
Figure 7-11
59. Refer to Figure 7-11. If the supply curve is S, the demand curve is D, and the equilibrium price
is $100, what is the producer surplus?
a. $625
b. $1,250
c. $2,500
d. $5,000
1828 Consumers, Producers, and the Efficiency of Markets
60. Refer to Figure 7-11. If the supply curve is S’, the demand curve is D, and the equilibrium price
is $150, what is the producer surplus?
a. $625
b. $1,250
c. $2,500
d. $5,000
61. Refer to Figure 7-11. If the demand curve is D and the supply curve shifts from S’ to S, what
is the change in producer surplus?
a. Producer surplus increases by $625.
b. Producer surplus increases by $1,875.
c. Producer surplus decreases by $625.
d. Producer surplus decreases by $1,875.
Consumers, Producers, and the Efficiency of Markets 1829
62. Refer to Figure 7-11. If the supply curve is S and the demand curve shifts from D to D’, what
is the change in producer surplus?
a. Producer surplus increases by $3,125.
b. Producer surplus increases by $5,625.
c. Producer surplus decreases by $3,125.
d. Producer surplus decreases by $5,625.
63. Refer to Figure 7-11. If the supply curve is S and the demand curve shifts from D to D’, what
is the increase in producer surplus to existing producers?
a. $625
b. $2,500
c. $3,125
d. $5,625
1830 Consumers, Producers, and the Efficiency of Markets
64. Refer to Figure 7-11. If the supply curve is S and the demand curve shifts from D to D’, what
is the increase in producer surplus due to new producers
a. $625
b. $2,500
c. $3,125
d. $5,625
Table 7-16
The following table represents the costs of five possible sellers.
Seller Cost ($)
Quentin
10
Ruby
30
Sandra
60
Thomas
100
Ursula
150
65. Refer to Table 7-16. If each producer has one unit available for sale, and if the market
equilibrium price is $80 per unit, how much is the total producer surplus in this market?
a. $90
b. $110
c. $130
d. $140
66. Refer to Table 7-16. If each producer has one unit available for sale, and if the market
equilibrium price is $70, how much is the combined total cost of all participating sellers in the
market?
Consumers, Producers, and the Efficiency of Markets 1831
a. $100
b. $150
c. $250
d. $350
67. Refer to Table 7-16. Suppose each of the five sellers can supply at most one unit of the good.
At which of the following prices would the market quantity supplied be exactly three units?
a. $20
b. $50
c. $90
d. $120
Figure 7-12
1832 Consumers, Producers, and the Efficiency of Markets
68. Refer to Figure 7-12. If the equilibrium price is $200, what is the producer surplus?
a. $7,500
b. $3,750
c. $10,000
d. $15,000
69. Refer to Figure 7-12. If the equilibrium price is $350, what is the producer surplus?
a. $60,000
b. $15,000
c. $30,000
d. $70,000
