Ch 7 Consumers, Producers, and The Efficiency of Markets
Quiz by Chen, Clara
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- Q1
Welfare economics is the study of
how the allocation of resources affects economic well-being.
the effect of income redistribution on work effort.
the well-being of less fortunate people.
60s - Q2
Producer surplus is
measured using the demand curve for a good.
the opportunity cost of production minus the cost of producing goods that go unsold.
the amount a seller is paid minus the cost of production.
60s - Q3
One of the basic principles of economics is that markets are usually a good way to organize economic activity. This principle is explained by the study of
labor economics.
welfare economics.
factor markets
60s - Q4
The particular price that results in the quantity supplied being equal to the quantity demanded is the best price because it
maximizes costs of the seller.
maximizes tax revenue for the government.
maximizes the combined welfare of buyers and sellers.
60s - Q5
Willingness to pay
measures the value that a buyer places on a good.
is the amount that a seller actually receives for a good minus the minimum amount that the seller is willing to accept
is the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.
60s - Q6
Consumer surplus is
the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.
the amount a buyer is willing to pay for a good minus the cost of producing the good.
the amount by which the quantity supplied of a good exceeds the quantity demanded of the good.
60s - Q7
Shreya buys a new printer for $195. She obtains a consumer surplus of $5on her purchase if her willingness to pay is
$190
$180
$200
60s - Q8
Lai Yoke is willing to pay $1000 for a wedding dress. She finds a wedding dress that she really likes for $970. Lai Yoke’s consumer surplus is
$15
$30
$35
60s - Q9
When a buyer’s willingness to pay for a good is equal to the price of the good,
the buyer will buy as much of the good as the buyer’s budget allows.
the buyer is indifferent between buying the good and not buying it.
the buyer’s consumer surplus for that good is maximized.
60s - Q10
Rani values a stainless steel dishwasher for her new house at $500. The actual price of the dishwasher is $650. Rani
buys the dishwasher and on her purchase, she experiences a consumer surplus of $-150.
does not buy the dishwasher and on her purchase, she experiences a consumer surplus of $0 on her non-purchase.
does not buy the dishwasher and on her purchase, she experiences a consumer surplus of $150 on her non-purchase.
60s - Q11
Producer surplus measures
the costs to sellers of participating in a market.
the price that buyers are willing to pay for sellers’ output of a good or service.
the benefits to sellers of participating in a market.
60s - Q12
The medical authority in a country announces that eating chocolate increases tooth decay. As a result, the equilibrium price of chocolate
decreases, and producer surplus decreases.
increases, and producer surplus decreases.
increases, and producer surplus increases.
60s - Q13
We can say that the allocation of resources is efficient if
producer surplus is maximized.
consumer surplus is maximized.
total surplus is maximized.
60s - Q14
Efficiency in a market is achieved when
the sum of producer surplus and consumer surplus is maximized.
all firms are producing the good at the same low cost per unit.
no buyer is willing to pay more than the equilibrium price for any unit of the good.
60s