Deck 5: Efficiency

Question 1

A seller's willingness to sell:

A) is the maximum price that a seller is willing to accept in exchange for a good or service.
B) is the minimum price that a seller is willing to accept in exchange for a good or service.
C) is always greater than a buyer's willingness to pay.
D) must always equal a buyer's willingness to buy.

Answer 1

is the minimum price that a seller is willing to accept in exchange for a good or service.

Question 2

When someone's willingness to pay is the same as the actual price paid for an item:

A) the individual will not purchase the item.
B) the individual's surplus is zero.
C) surplus cannot be maximized.
D) All of these are correct.

Answer 2

the individual's surplus is zero.

Question 3

Suppose Sally purchases a pair of shoes for $45. Which of the following prices could represent Sally's willingness to pay for a pair of shoes?

A) $15.00
B) $25.00
C) $44.99
D) $55.00

Answer 3

$55.00

Question 4

At prices above a consumer's willingness to pay:

A) the opportunity cost of buying the good is less than the benefit received from having the good.
B) the opportunity cost of buying the good is greater than the benefit received from having the good.
C) the buyer will purchase the good and attempt to resell after receiving due benefit.
D) the buyer needs more income in order to buy the good.

Question 5

The maximum price that a buyer would be willing to pay for a good or service is also called:

A) willingness to pay.
B) the buyer-max price.
C) the reserved max price.
D) opportunity cost.

Question 6

Suppose Takumi's willingness to pay for one snowboard is $250 and his willingness to pay for a second snowboard is $400. How many snowboards would Takumi buy if the market price of snowboards is $500?

A) 0
B) 1
C) 2
D) The amount of snowboards purchased would depend on Takumi's income.

Question 7

The demand curve represents consumer's:

A) willingness to pay.
B) trade-offs.
C) surplus.
D) willingness to sell.

Question 8

If the price of a good is less than a buyer's willingness to pay, the buyer will _____ the good because the opportunity cost of buying the good is _____ than the benefit received from consuming the good.

A) purchase; less
B) purchase; more
C) not purchase; less
D) not purchase; more.

Question 9

Suppose Sam's opportunity cost of producing a sweater is $37. Which of the following prices would he have to observe in the market in order to sell a sweater?

A) $37
B) $37.01
C) $50
D) Sam would sell a sweater at any of these prices.

Question 10

The willingness to pay of buyers in a market:

A) is represented by the demand curve.
B) is represented by the supply curve.
C) explains why the demand curve is bowed-out.
D) explains why the demand curve is bowed-in.

Question 11

A consumer's willingness to pay:

A) is the maximum price that the consumer would be willing to pay for a good or service.
B) is the minimum price that the consumer would be willing to pay for a good or service.
C) is known as the consumer's reserved minimum bid-price.
D) must always equal a seller's willingness to sell.

Question 12

The concept of surplus can show:

A) the benefits of introducing new markets.
B) who benefits from a tax.
C) who loses from minimum wage.
D) All of these are correct.

Question 13

Each seller's opportunity costs are:

A) determined monetarily, which is why they can never be zero.
B) determined by a number of factors, none of which is monetary.
C) determined by a number of factors, including monetary considerations.
D) less than the monetary costs of manufacturing the good or service.

Question 14

In economics, the concept of surplus:

A) measures the benefit that people receive when they buy something for less than they would have been willing to pay.
B) measures the benefit that people receive when they sell something for more than they would have been willing to accept.
C) is the best way to look at the benefits people receive from successful transactions.
D) All of these are correct.

Question 15

Surplus refers to the difference between:

A) the price at which a buyer or seller would be willing to trade and the actual price.
B) the willingness to pay and the actual price paid.
C) the willingness to sell and the actual price accepted.
D) All of these are correct.

Question 16

A buyer always wants to pay a price that is as _____ as possible, but never _____ than the buyer's willingness to pay.

A) high; higher
B) low; lower
C) low; higher
D) high; lower

Question 17

If Ayana's willingness to pay for a sweater is $37, which of the following prices would she have to observe in the market in order to buy a sweater?

A) $37.01
B) $38.00
C) $37.00
D) Ayana would not buy a sweater at any of these prices.

Question 18

If Thelma's willingness to sell her homemade fudge is $4, at which of the following prices would Thelma sell?

A) $2
B) $3.99
C) $4.01
D) Thelma would not sell her fudge at any of these prices.

Question 19

Suppose Miguel wishes to buy a baseball glove. He observes that the market price of a glove is $43 and decides not to buy one. Which of the following prices could represent Miguel's willingness to pay for a baseball glove?

A) $37
B) $45
C) $50
D) None of these could represent Miguel's willingness to pay.

Question 20

A seller's willingness to sell:

A) must always be equal to a buyer's willingness to pay.
B) is determined by the opportunity cost of producing and selling the good.
C) is determined by a buyer's willingness to pay.
D) can never be higher than the market price.

Question 21

Assume the market depicted in the graph is in equilibrium. What is consumer surplus?

A) $10
B) $15
C) $20
D) $30

Question 22

Assume the market depicted in the graph is in equilibrium. What is consumer surplus?

A) $40.
B) $80.
C) $160.
D) $240.

Question 23

A market has four individuals, each considering buying a grill. Assume that grills come in only one size and model. Martina considers herself a grill-master, and finds a grill a necessity, so she is willing to pay $400 for a grill. Javier is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Kamal wants to impress his friends with his vegetable grilling skills and is willing to pay $320 for a grill. Lina loves grilled shrimp and thinks it might be cheaper in the long run if she grills her own shrimp instead of eating out at a restaurant, so she is willing to pay $200 for a grill.If the market price of grills increases from $300 to $325,:

A) Kamal would drop out of the market.
B) Kamal's surplus would decrease the most.
C) Kamal is the only consumer who would be affected in terms of surplus.
D) Lina's surplus would decrease.

Question 24

A market has four individuals, each considering buying a grill. Assume that grills come in only one size and model. Martina considers herself a grill-master, and finds a grill a necessity, so she is willing to pay $400 for a grill. Javier is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Kamal wants to impress his friends with his vegetable grilling skills and is willing to pay $320 for a grill. Lina loves grilled shrimp and thinks it might be cheaper in the long run if she grills her own shrimp instead of eating out at a restaurant, so she is willing to pay $200 for a grill.If the market price of grills increases from $310 to $350:

A) total consumer surplus would fall by $120.
B) total consumer surplus would fall by $90.
C) Kamal and Javier would experience a decrease in consumer surplus, but Martina's consumer surplus would rise.
D) Kamal would experience a decrease in consumer surplus, but Martina and Javier would experience a rise in consumer surplus.

Question 25

A market has four individuals, each considering buying a grill. Assume that grills come in only one size and model. Martina considers herself a grill-master, and finds a grill a necessity, so she is willing to pay $400 for a grill. Javier is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Kamal wants to impress his friends with his vegetable grilling skills and is willing to pay $320 for a grill. Lina loves grilled shrimp and thinks it might be cheaper in the long run if she grills her own shrimp instead of eating out at a restaurant, so she is willing to pay $200 for a grill.If the market price of grills falls from $395 to $340, which of the following statements is true?

A) Martina's consumer surplus increases from $5 to $60, and total consumer surplus increases from $5 to $70.
B) Martina's consumer surplus decreases from $60 to $5, and total consumer surplus decreases from $70 to $5.
C) Kamal's consumer surplus increases from $0 to $20, and total consumer surplus increases from $5 to $70.
D) Javier's consumer surplus decreases from $10 to $0, and total consumer surplus increases from $10 to $80.

Question 26

What consumer surplus is received by someone whose willingness to pay is $35 below the market price of a good?

A) $35
B) $0
C) ($35 × P*)
D) None of these are correct.

Question 27

Suppose Advik's willingness to pay for a cup of coffee is $1, which is equal to its price. Which of the following statements is true?

A) Advik is indifferent about purchasing a cup of coffee.
B) Advik will get no surplus by purchasing a cup of coffee.
C) Advik will get the same surplus whether he purchases a cup of coffee or not.
D) All of these are correct.

Question 28

A market has four individuals, each considering buying a grill. Assume that grills come in only one size and model. Martina considers herself a grill-master, and finds a grill a necessity, so she is willing to pay $400 for a grill. Javier is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Kamal wants to impress his friends with his vegetable grilling skills and is willing to pay $320 for a grill. Lina loves grilled shrimp and thinks it might be cheaper in the long run if she grills her own shrimp instead of eating out at a restaurant, so she is willing to pay $200 for a grill.If the market price of grills falls from $375 to $330, which of the following statements is true?

A) Javier will join the market but will receive no consumer surplus.
B) Javier and Kamal will join the market and together will receive $30 in consumer surplus.
C) Martina will experience a decrease in consumer surplus of $45.
D) Martina will experience an increase in consumer surplus of $45.

Question 29

Assume the market depicted in the graph is in equilibrium at demand (D) and supply (S₁). Consumer surplus is:

A) greater than it is when market is in equilibrium at D and S₂.
B) less than it is when market is in equilibrium at D and S₂.
C) the same as it is when market is in equilibrium at D and S₂.
D) zero.

Question 30

Surplus is:

A) a measure of the value that buyers and sellers get from participating in a market
B) maximized for individuals whose willingness to pay equals the market price.
C) negative for all individuals who do not participate in a market.
D) All of these are correct.

Question 31

A market has four individuals, each considering buying a grill. Assume that grills come in only one size and model. Martina considers herself a grill-master, and finds a grill a necessity, so she is willing to pay $400 for a grill. Javier is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Kamal wants to impress his friends with his vegetable grilling skills and is willing to pay $320 for a grill. Lina loves grilled shrimp and thinks it might be cheaper in the long run if she grills her own shrimp instead of eating out at a restaurant, so she is willing to pay $200 for a grill.If the market price of grills is $300, who will participate in the market?

A) Only Martina, Javier, and Kamal will participate
B) Only Kamal and Lina will participate
C) Only Martina and Javier will participate
D) Only Lina will participate

Question 32

If price is set at $11 in the market shown in the graph, consumer surplus will consist of areas:

A) A + B + G.
B) B + G + L
C) A + B + C + G + H + L
D) A + B + C + G + H + I + J

Question 33

Assume the market depicted in the graph is in equilibrium. What is consumer surplus?

A) $30
B) $80
C) $120
D) $200

Question 34

A market has four individuals, each considering buying a grill. Assume that grills come in only one size and model. Martina considers herself a grill-master, and finds a grill a necessity, so she is willing to pay $400 for a grill. Javier is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Kamal wants to impress his friends with his vegetable grilling skills and is willing to pay $320 for a grill. Lina loves grilled shrimp and thinks it might be cheaper in the long run if she grills her own shrimp instead of eating out at a restaurant, so she is willing to pay $200 for a grill.If the market price of grills is $300, what would total consumer surplus be?

A) $1,070
B) $170
C) $200
D) $80

Question 35

A market has four individuals, each considering buying a grill. Assume that grills come in only one size and model. Martina considers herself a grill-master, and finds a grill a necessity, so she is willing to pay $400 for a grill. Javier is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Kamal wants to impress his friends with his vegetable grilling skills and is willing to pay $320 for a grill. Lina loves grilled shrimp and thinks it might be cheaper in the long run if she grills her own shrimp instead of eating out at a restaurant, so she is willing to pay $200 for a grill.If the market price of grills is $320, what is Martina's consumer surplus?

A) $400
B) $350
C) $320
D) $80

Question 36

A market has four individuals, each considering buying a grill. Assume that grills come in only one size and model. Martina considers herself a grill-master, and finds a grill a necessity, so she is willing to pay $400 for a grill. Javier is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Kamal wants to impress his friends with his vegetable grilling skills and is willing to pay $320 for a grill. Lina loves grilled shrimp and thinks it might be cheaper in the long run if she grills her own shrimp instead of eating out at a restaurant, so she is willing to pay $200 for a grill.If the market price of grills is $350, what is total consumer surplus?

A) $750
B) $400
C) $50
D) $870

Question 37

Assume the market in the graph is in equilibrium at demand (D) and supply (S₁). If supply shifts to S₂, and a new equilibrium is reached, which of the following statements is true?

A) Consumer surplus increases by $45.
B) Producer surplus decreases by $45.
C) Consumer surplus increases by $90.
D) Total surplus increases by $45.

Question 38

Assume the market depicted in the graph is in equilibrium. Consumer surplus consists of which area(s)?

A) A
B) A + B + C
C) A + B + C + D + E
D) D + E

Question 39

Assume the market depicted in the graph is in equilibrium. What is consumer surplus?

A) $36
B) $72
C) $120
D) $60

Question 40

Assume the market depicted in the graph is in equilibrium. Consumer surplus is the area:

A) under the supply curve and above the market price.
B) above the supply curve and below the market price.
C) under the demand curve and above the market price.
D) above the demand curve and below the market price.

Question 41

Assume the market depicted in the graph is in equilibrium. What is consumer surplus?

A) $54,000
B) $72,000
C) $126,000
D) $108,000

Question 42

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers decreased from $13 to $11, total producer surplus would:

A) decrease from $9 to $5.
B) increase from $5 to $9.
C) decrease from $30 to $17.
D) remain unchanged.

Question 43

Assume the market depicted in the graph is in equilibrium. What is consumer surplus?

A) $27.00
B) $54.00
C) $40.50
D) $67.50

Question 44

Assume the market depicted in the graph is in equilibrium. What is consumer surplus?

A) $20
B) $30
C) $50
D) $60

Question 45

According to the graph shown, if the market goes from equilibrium to having its price set at $10:

A) deadweight loss will become bigger than total surplus.
B) consumer surplus will definitely fall.
C) total surplus may rise or fall.
D) $12 of surplus will be transferred from producers to consumers.

Question 46

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers increased from $7 to $11:

A) more producers would participate in the market.
B) only Bob's Hardware would lose surplus.
C) both Bob's Hardware and Lace Hardware would lose surplus.
D) House Depot is the only producer that would gain surplus.

Question 47

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers increased from $6 to $8:

A) producer participation in the market would increase.
B) producer participation in the market would decrease.
C) producer participation in the market would remain unchanged.
D) total producer surplus would increase by $2.

Question 48

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers increased from $9 to $12, total producer surplus would increase by:

A) $1.
B) $3.
C) $5.
D) $7.

Question 49

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers increased from $9 to $13, producer surplus would:

A) increase for each producer.
B) increase only for House Depot.
C) remain unchanged for Bob's Hardware.
D) increase by $4 for Lace Hardware.

Question 50

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers decreased from $15 to $10:

A) Bob's Hardware would lose $5 of producer surplus.
B) producer surplus would fall by $5 for each producer.
C) Bob's Hardware would no longer sell hammers.
D) total producer surplus would fall by $15.

Question 51

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers decreased from $15 to $11:

A) total producer surplus would fall by $4.
B) producer surplus would fall by $4 for each producer.
C) House Depot's producer surplus would fall by $4.
D) total producer surplus would fall by $8.

Question 52

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers decreased from $17 to $12:

A) producer participation in the market would increase.
B) producer participation in the market would decrease.
C) producer participation in the market would not be affected.
D) total producer surplus would remain unchanged.

Question 53

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers increased from $8 to $12, producer surplus would increase:

A) from $8 to $12.
B) by $4 for each producer.
C) by $4 for House Depot.
D) by $7 in total.

Question 54

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers is $12, what would total producer surplus be?

A) $7
B) $9
C) $17
D) $30

Question 55

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers is $10, which of the following statements is true?

A) Only House Depot would have positive surplus by supplying hammers to the market.
B) Only House Depot and Lace Hardware would have positive surplus by supplying hammers to the market.
C) House Depot, Lace Hardware, and Bob's Hardware would all supply hammers to the market, but Bob's would have negative surplus.
D) Only House Depot and Bob's Hardware would supply hammers to the market.

Question 56

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers increased from $6 to $7, what would happen to total producer surplus?

A) It would increase.
B) It would remain unchanged.
C) It would decrease.
D) We cannot determine this with the information given.

Question 57

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers decreased from $15 to $13, which of the following can be said with certainty?

A) Bob's Hardware would no longer participate in the market.
B) Total producer surplus would decrease.
C) Only Bob's Hardware would experience a drop in producer surplus.
D) Bob's Hardware would continue to participate in the market.

Question 58

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers is $13, what would total producer surplus be?

A) $9
B) $30
C) $17
D) $7

Question 59

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers increased from $8 to $11, total producer surplus would:

A) increase to $5.
B) decrease to $2.
C) increase to $17.
D) decrease to $7.

Question 60

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers increased from $8 to $11, total producer surplus would increase by:

A) $3.
B) $6.
C) $9.
D) $4.

Question 61

Assume the market depicted in the graph is in equilibrium. Which of the following statements is true?

A) Consumer surplus is greater than producer surplus.
B) Producer surplus is greater than consumer surplus.
C) Consumer surplus is the same as producer surplus.
D) Total surplus is smaller than producer surplus.

Question 62

Assume the market depicted in the graph is in equilibrium. Producer surplus consists of area(s):

A) A.
B) A + B + C.
C) A + B + C + D + E.
D) D + E.

Question 63

Assume the market depicted in the graph is in equilibrium. Producer surplus is the area:

A) under the demand curve and above the market price.
B) under the supply curve and above the market price.
C) above the supply curve and below the market price.
D) above the demand curve and below the market price.

Question 64

Assume the market depicted in the graph is in equilibrium. If its price is subsequently set at $12, producer surplus will be areas:

A) B + C + D + F + G + H
B) B + C + D + E + F + G + H
C) A + B + F + H
D) B + F + H

Question 65

Assume the market depicted in the graph is in equilibrium. What is producer surplus?

A) $36
B) $48
C) $120
D) None of these are correct.

Question 66

Assume the market depicted in the graph is in equilibrium. Total surplus consists of area(s):

A) A + B + C.
B) B.
C) A.
D) A + B.

Question 67

Assume the market depicted in the graph is in equilibrium. What is producer surplus?

A) $30
B) $20
C) $50
D) $60

Question 68

Assume the market depicted in the graph is in equilibrium. What is producer surplus?

A) $10
B) $6
C) $2
D) $20

Question 69

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers increased from $9 to $13:

A) House Depot's producer surplus would increase by $4.
B) Lace Hardware Hardware's producer surplus would increase by $3.
C) Bob's Hardware's producer surplus would remain unchanged.
D) All of these statements are true.

Question 70

Assume the market depicted in the graph is in equilibrium. If the price is set below $6:

A) producer surplus will increase.
B) producer surplus will decrease.
C) total surplus will increase.
D) quantity will increase.

Question 71

Assume there are three bakeries, each willing to sell one dozen cupcakes in a given time period. The Sweet Treat can offer a dozen cupcakes for a minimum of $6. The Cake Corner can offer a dozen cupcakes for a minimum of $9. Pastry Place can offer a dozen cupcakes for a minimum of $13.If the market price of one dozen cupcakes increased from $7 to $10:

A) total surplus would decrease by $5.
B) Pastry Place's producer surplus would decrease by $3.
C) total surplus would increase by $4.
D) The Cake Corner's surplus would increase by $3.

Question 72

Assume the market depicted in the graph is in equilibrium. If supply increases:

A) consumer surplus will increase.
B) producer surplus will increase.
C) total surplus will increase.
D) quantity will increase.

Question 73

Assume the market depicted in the graph is in equilibrium. What is producer surplus?

A) $180
B) $80
C) $120
D) $200

Question 74

Assume the market depicted in the graph is in equilibrium. What is total surplus?

A) $40
B) $64
C) $80
D) $160

Question 75

Assume there are three bakeries, each willing to sell one dozen cupcakes in a given time period. The Sweet Treat can offer a dozen cupcakes for a minimum of $6. The Cake Corner can offer a dozen cupcakes for a minimum of $9. Pastry Place can offer a dozen cupcakes for a minimum of $13.If the market price of one dozen cupcakes increased from $8 to $12:

A) The Sweet Treat's producer surplus would increase by $6.
B) Pastry Place's producer surplus would increase by $1.
C) The Cake Corner's producer surplus would remain unchanged.
D) All of these statements are true.

Question 76

What is the producer surplus earned by a seller whose willingness to sell is $10 below the market price of a good?

A) $0
B) $10
C) (P* − $10)
D) None of these are correct.

Question 77

Assume the market in the graph is in equilibrium at demand (D) and supply (S₁). If the supply curve shifts to S₂, and a new equilibrium is reached, producer surplus will:

A) increase by $90.
B) increase by $120.
C) decrease by $20.
D) decrease by $30.

Question 78

Assume the market depicted in the graph is in equilibrium. What is producer surplus?

A) $360
B) $40
C) $160
D) $120

Question 79

Assume the market depicted in the graph is in equilibrium. What is total surplus?

A) $72
B) $90
C) $50
D) $130

Question 80

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers increased from $8 to $14, total producer surplus would increase from:

A) $8 to $14.
B) $1 to $12.
C) $14 to $8.
D) $7 to $30.