Deck 4: Economic Efficiency, government Price Setting, and Taxes

Question 1

Each point on a ________ curve shows the willingness of consumers to purchase a product at different prices.

A)demand
B)supply
C)production possibilities
D)marginal cost

Answer 1

A

Question 2

Table 4-2
$$\begin{array} { | l | c | } \hline \text { Consumer } & \text { Willingness to Pay } \\\hline \text { Anya } & \$ 24 \\\hline \text { Basil } & 20 \\\hline \text { Celeste } & 15 \\\hline \text { Dralon } & 12 \\\hline \text { Esther } & 7 \\\hline\end{array}$$

-Refer to Table 4-2.The table above lists the highest prices five consumers are willing to pay for a theater ticket.If the price of one of the tickets is $18

A)Anya and Basil will each buy two tickets.
B)Basil will receive $2 of consumer surplus from buying one ticket.
C)Anya and Basil receive a total of $26 of consumer surplus from buying one ticket each.No one else will buy a ticket.
D)Celeste,Dralon,and Esther will receive a total of $34 of consumer surplus since they will buy no tickets.

Answer 2

Basil will receive $2 of consumer surplus from buying one ticket.

Question 3

Table 4-2
$$\begin{array} { | l | c | } \hline \text { Consumer } & \text { Willingness to Pay } \\\hline \text { Anya } & \$ 24 \\\hline \text { Basil } & 20 \\\hline \text { Celeste } & 15 \\\hline \text { Dralon } & 12 \\\hline \text { Esther } & 7 \\\hline\end{array}$$

-Refer to Table 4-2.The table above lists the highest prices five consumers are willing to pay for a theater ticket.If the price of one of the tickets is $10

A)everyone will buy a ticket except for Esther.
B)only Anya and Basil will buy tickets.
C)Celeste's consumer surplus is $25.
D)the total consumer surplus from the purchase of tickets will be $61.

Answer 3

everyone will buy a ticket except for Esther.

Question 4

Table 4-2
$$\begin{array} { | l | c | } \hline \text { Consumer } & \text { Willingness to Pay } \\\hline \text { Anya } & \$ 24 \\\hline \text { Basil } & 20 \\\hline \text { Celeste } & 15 \\\hline \text { Dralon } & 12 \\\hline \text { Esther } & 7 \\\hline\end{array}$$

-Refer to Table 4-2.The table above lists the highest prices five consumers are willing to pay for a theater ticket.If the price of one ticket falls from $25 to $10

A)only three tickets will be sold.
B)consumer surplus decreases from $24 to $12.
C)consumer surplus increases from $0 to $31.
D)everyone will buy a ticket.

Question 5

Paul goes to Sportsmart to buy a new tennis racquet.He is willing to pay $200 for a new racquet,but buys one on sale for $125.Paul's consumer surplus from the purchase is

A)$325.
B)$200.
C)$125.
D)$75.

Question 6

Willingness to pay measures

A)the maximum price a buyer is willing to pay for a product minus the amount the buyer actually pays for it.
B)the amount a seller actually receives for a good minus the minimum amount the seller is willing to accept for the good.
C)the maximum price that a buyer is willing to pay for a good or service.
D)the maximum price a buyer is willing to pay minus the minimum price a seller is willing to accept.

Question 7

Marginal cost is

A)the total cost of producing one unit of a good or service.
B)the average cost of producing a good or service.
C)the difference between the lowest price a firm would have been willing to accept and the price it actually receives.
D)the additional cost to a firm of producing one more unit of a good or service.

Question 8

Table 4-2
$$\begin{array} { | l | c | } \hline \text { Consumer } & \text { Willingness to Pay } \\\hline \text { Anya } & \$ 24 \\\hline \text { Basil } & 20 \\\hline \text { Celeste } & 15 \\\hline \text { Dralon } & 12 \\\hline \text { Esther } & 7 \\\hline\end{array}$$

-Refer to Table 4-2.The table above lists the highest prices five consumers are willing to pay for a theater ticket.If the price of one ticket rises from $10 to $19

A)only three tickets will be sold.
B)consumer surplus decreases from $31 to $6.
C)consumer surplus increases from $44 to $71.
D)no one will buy a ticket.

Question 9

Consumers are willing to purchase a product up to the point where

A)the marginal benefit of consuming the product is equal to the marginal cost of consuming it.
B)the consumer surplus is equal to the producer surplus.
C)the marginal benefit of consuming the product equals the area below the supply curve and above the market price.
D)the marginal benefit of consuming a product is equal to its price.

Question 10

Table 4-1
$$\begin{array} { | l | c | } \hline \text { Consumer } & \text { Willingness to Pay } \\\hline \text { Tom } & \$ 40 \\\hline \text { Dick } & 30 \\\hline \text { Harriet } & 25 \\\hline\end{array}$$

-Refer to Table 4-1.The table above lists the highest prices three consumers,Tom,Dick,and Harriet,are willing to pay for a short-sleeved polo shirt.If the price of one of the shirts is $28 dollars

A)Tom will buy two shirts,Dick will buy one shirt and Harriet will buy no shirts.
B)Tom will receive $12 of consumer surplus from buying one shirt.
C)Tom and Dick receive a total of $70 of consumer surplus from buying one shirt each.Harriet will buy no shirts.
D)Harriet will receive $25 of consumer surplus since she will buy no shirts.

Question 11

In New York City,about 1 million apartments are subject to rent control by the local government.Rent control

A)puts a legal limit on the rent that landlords can charge for an apartment.
B)is a price floor which sets a minimum rent for apartments.
C)only applies to those apartments which are owned and rented out by the local government.
D)is a government policy which limits apartment rental to those people whose incomes are less than $50,000 per year.

Question 12

Lucinda buys a new GPS system for $250.She receives consumer surplus of $75 from the purchase.What value does Lucinda place on her GPS system?

A)$75
B)$175
C)$250
D)$325

Question 13

Frieda is at her local florist to buy a dozen roses.She is willing to pay $75 for the roses,and buys them for $75.Frieda's consumer surplus from the purchase is

A)$150.
B)$75.
C)$37.50.
D)$0.

Question 14

Which of the following statements best describes the concept of consumer surplus?

A)"Safeway was having a sale on Dreyer's ice cream so I bought 3 quarts."
B)"I was all ready to pay $300 for a new leather jacket that I had seen in Macy's but I ended up paying only $180 for the same jacket."
C)"I paid $130 for a printer last week.This week the same store is selling the same printer for $110."
D)"I sold my Blu-ray copy of Ben-Hur for $18 at a garage sale even though I was willing to sell it for $10."

Question 15

Marginal benefit is equal to the ________ benefit a consumer receives from consuming one more unit of a good or service.

A)total
B)unintended
C)additional
D)surplus

Question 16

The difference between the highest price a consumer is willing to pay for a good and the price the consumer actually pays is called

A)producer surplus.
B)the substitution effect.
C)the income effect.
D)consumer surplus.

Question 17

Table 4-1
$$\begin{array} { | l | c | } \hline \text { Consumer } & \text { Willingness to Pay } \\\hline \text { Tom } & \$ 40 \\\hline \text { Dick } & 30 \\\hline \text { Harriet } & 25 \\\hline\end{array}$$

-Refer to Table 4-1.The table above lists the highest prices three consumers,Tom,Dick,and Harriet,are willing to pay for a short-sleeved polo shirt.If the price of the shirts falls from $28 to $20

A)consumer surplus increases from $14 to $35.
B)Tom will buy two shirts;Dick and Harriet will each buy one shirt.
C)consumer surplus will increase from $70 to $95.
D)Harriet will receive more consumer surplus than Tom or Dick.

Question 18

Arthur buys a new cell phone for $150.He receives consumer surplus of $150 from the purchase.What value does Arthur place on his cell phone?

A)$0
B)$150
C)$225
D)$300

Question 19

In a city with rent-controlled apartments,all of the following are true except

A)apartments usually rent for rates lower than the market rate.
B)apartments are often in shorter supply than they would be without rent control.
C)it usually takes more time to find an apartment than it would without rent control.
D)landlords have an incentive to rent more apartments than they would without rent control.

Question 20

Table 4-2
$$\begin{array} { | l | c | } \hline \text { Consumer } & \text { Willingness to Pay } \\\hline \text { Anya } & \$ 24 \\\hline \text { Basil } & 20 \\\hline \text { Celeste } & 15 \\\hline \text { Dralon } & 12 \\\hline \text { Esther } & 7 \\\hline\end{array}$$

-Refer to Table 4-2.The table above lists the highest prices five consumers are willing to pay for a theater ticket.If the price of one ticket is $25

A)everyone will buy a ticket.
B)consumer surplus will be maximized.
C)Anya's consumer surplus is $1.
D)no one will buy a ticket.

Question 21

Figure 4-1 shows Arnold's demand curve for burritos.

-Refer to Figure 4-1.Arnold's marginal benefit from consuming the second burrito is

A)$1.00.
B)$1.50.
C)$2.00.
D)$4.50.

Question 22

Table 4-3
$$\begin{array} { | c | c | } \hline \begin{array} { c } \text { The Waco Kid's } \\\text { Cowboy Hats }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Cost } \\\text { (dollars) }\end{array} \\\hline \text { 1st hat } & \$ 24 \\\hline \text { 2nd hat } & 30 \\\hline \text { 3rd hat } & 38 \\\hline \text { 4th hat } & 46 \\\hline\end{array}$$

-Refer to Table 4-3.The table above lists the marginal cost of cowboy hats by The Waco Kid,a firm that specializes in producing western wear.If the market price of cowboy hats is $50,how many hats will be produced?

A)0
B)1
C)2
D)4

Question 23

A demand curve shows

A)the willingness of consumers to buy a product at different prices.
B)the willingness of consumers to substitute one product for another product.
C)the relationship between the price of a product and the demand for the product.
D)the relationship between the price of a product and the total benefit consumers receive from the product.

Question 24

Figure 4-1 shows Arnold's demand curve for burritos.

-Refer to Figure 4-1.If the market price is $1.00,what is the consumer surplus on the third burrito?

A)$0.50
B)$1.00
C)$1.50
D)$7.50

Question 25

Figure 4-1 shows Arnold's demand curve for burritos.

-Refer to Figure 4-1.If the market price is $1.50,what is the consumer surplus on the first burrito?

A)$0.50
B)$1.00
C)$1.50
D)$7.50

Question 26

Figure 4-1 shows Arnold's demand curve for burritos.

-Refer to Figure 4-1.If the market price is $1.00,what is Arnold's consumer surplus?

A)$1.00
B)$2.00
C)$3.00
D)$7.00

Question 27

Table 4-3
$$\begin{array} { | c | c | } \hline \begin{array} { c } \text { The Waco Kid's } \\\text { Cowboy Hats }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Cost } \\\text { (dollars) }\end{array} \\\hline \text { 1st hat } & \$ 24 \\\hline \text { 2nd hat } & 30 \\\hline \text { 3rd hat } & 38 \\\hline \text { 4th hat } & 46 \\\hline\end{array}$$

-Refer to Table 4-3.The table above lists the marginal cost of cowboy hats by The Waco Kid,a firm that specializes in producing western wear.If the price of cowboy hats decreases from $38 to $30

A)consumer surplus will rise by $6.
B)the marginal cost of producing the third cowboy hat will fall to $30.
C)producer surplus will fall from $22 to $6.
D)producer surplus will rise from $8 to $24.

Question 28

Figure 4-1 shows Arnold's demand curve for burritos.

-Refer to Figure 4-1.Arnold's marginal benefit from consuming the third burrito is

A)$1.25.
B)$1.50.
C)$2.50.
D)$6.00.

Question 29

Figure 4-1 shows Arnold's demand curve for burritos.

-Refer to Figure 4-1.If the market price is $1.50,what is the consumer surplus on the second burrito?

A)$0.50
B)$1.00
C)$1.50
D)$3.50

Question 30

The total amount of producer surplus in a market is equal to

A)the difference between quantity supplied and quantity demanded.
B)the area above the market supply curve and below the market price.
C)the area above the market supply curve.
D)the area between the demand curve and the supply curve below the market price.

Question 31

Table 4-3
$$\begin{array} { | c | c | } \hline \begin{array} { c } \text { The Waco Kid's } \\\text { Cowboy Hats }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Cost } \\\text { (dollars) }\end{array} \\\hline \text { 1st hat } & \$ 24 \\\hline \text { 2nd hat } & 30 \\\hline \text { 3rd hat } & 38 \\\hline \text { 4th hat } & 46 \\\hline\end{array}$$

-Refer to Table 4-3.The table above lists the marginal cost of cowboy hats by The Waco Kid,a firm that specializes in producing western wear.If the price of cowboy hats increases from $38 to $46

A)consumers will buy no cowboy hats.
B)the marginal cost of producing the third cowboy hat will increase to $46.
C)producer surplus will rise from $22 to $46.
D)there will be a surplus of cowboy hats.

Question 32

Table 4-3
$$\begin{array} { | c | c | } \hline \begin{array} { c } \text { The Waco Kid's } \\\text { Cowboy Hats }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Cost } \\\text { (dollars) }\end{array} \\\hline \text { 1st hat } & \$ 24 \\\hline \text { 2nd hat } & 30 \\\hline \text { 3rd hat } & 38 \\\hline \text { 4th hat } & 46 \\\hline\end{array}$$

-Refer to Table 4-3.The table above lists the marginal cost of cowboy hats by The Waco Kid,a firm that specializes in producing western wear.If the market price of cowboy hats is $35,The Waco Kid will produce

A)1 hat.
B)2 hats.
C)3 hats.
D)4 hats.

Question 33

Which of the following statements is true?

A)Consumer surplus measures the total benefit from participating in a market.
B)When a market is in equilibrium consumer surplus equals producer surplus.
C)Consumer surplus measures the net benefit from participating in a market.
D)Producer surplus measures the total benefit received by producers from participating in a market.

Question 34

Figure 4-1 shows Arnold's demand curve for burritos.

-Refer to Figure 4-1.Arnold's marginal benefit from consuming the fourth burrito is

A)$0.
B)$1.00.
C)$2.50.
D)$3.00.

Question 35

Table 4-3
$$\begin{array} { | c | c | } \hline \begin{array} { c } \text { The Waco Kid's } \\\text { Cowboy Hats }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Cost } \\\text { (dollars) }\end{array} \\\hline \text { 1st hat } & \$ 24 \\\hline \text { 2nd hat } & 30 \\\hline \text { 3rd hat } & 38 \\\hline \text { 4th hat } & 46 \\\hline\end{array}$$

-Refer to Table 4-3.The table above lists the marginal cost of cowboy hats by The Waco Kid,a firm that specializes in producing western wear.If the market price of The Waco Kid's cowboy hats is $40

A)The Waco Kid will produce four hats.
B)producer surplus from the first hat is $40.
C)producer surplus will equal $28.
D)there will be a surplus;as a result,the price will fall to $24.

Question 36

The area ________ the market supply curve and ________ the market price is equal to the total amount of producer surplus in a market.

A)above;above
B)above;below
C)below;above
D)below;below

Question 37

Figure 4-1 shows Arnold's demand curve for burritos.

-Refer to Figure 4-1.If the market price is $1.00,what is the consumer surplus on the fourth burrito?

A)$0
B)$0.50
C)$1.50
D)$2.25

Question 38

A ________ curve shows the marginal cost of producing one more unit of a good or service.

A)demand
B)supply
C)production possibilities
D)marginal benefit

Question 39

Table 4-3
$$\begin{array} { | c | c | } \hline \begin{array} { c } \text { The Waco Kid's } \\\text { Cowboy Hats }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Cost } \\\text { (dollars) }\end{array} \\\hline \text { 1st hat } & \$ 24 \\\hline \text { 2nd hat } & 30 \\\hline \text { 3rd hat } & 38 \\\hline \text { 4th hat } & 46 \\\hline\end{array}$$

-Refer to Table 4-3.The table above lists the marginal cost of cowboy hats by The Waco Kid,a firm that specializes in producing western wear.If the market price of cowboy hats is $50,producer surplus is

A)$0.
B)$4.
C)$62.
D)$138.

Question 40

Consumer surplus in a market for a product would be equal to ________ if the market price was zero.

A)zero
B)the area between the supply curve and the demand curve
C)the area above the supply curve
D)the area under the demand curve

Question 41

Figure 4-2
Refer to Figure 4-2.What area represents the increase in producer surplus when the market price rises from P1 to P2?

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

Question 42

Figure 4-2
Refer to Figure 4-2.What area represents the decrease in producer surplus when the market price falls from P2 to P1?

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

Question 43

Figure 4-2
Refer to Figure 4-2.What area represents producer surplus at a price of P1?

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

Question 44

The difference between the ________ and the ________ from the sale of a product is called producer surplus.

A)lowest price a firm would have been willing to accept;price it actually receives
B)highest price a firm would have been willing to accept;lowest price it was willing to accept
C)cost to produce a product;price a firm actually receives
D)cost to produce a product;profit received

Question 45

Juanita goes to the Hardware Emporium to buy a new circular saw.She is willing to pay $120 for a new saw,but buys one on sale for $85.Juanita's consumer surplus from the purchase is

A)$35.
B)$85.
C)$120.
D)$205.

Question 46

The difference between the ________ for a good and the ________ is called consumer surplus.

A)highest price a consumer is willing to pay;lowest price a consumer is willing to pay
B)lowest price a consumer is willing to pay;price the consumer actually pays
C)highest price a consumer is willing to pay;price the consumer actually pays
D)price the consumer actually pays;actual cost to the producer

Question 47

Suppose there are two cities that have rent controlled apartments.In one city (Albany)all apartments are subject to rent control;in the other city (Halftrack)one-half of the apartments are rent controlled.Which of the following is most likely to be true?

A)It will be difficult to find a rent-controlled apartment in Albany or Halftrack;rents for the Halftrack apartments not subject to controls will be higher than they would be without rent control.
B)It will be easier to find an affordable apartment in Albany since rents will be low across the board.
C)It will be easier to find an affordable apartment in Halftrack,either a rent-controlled apartment or another apartment,at a reasonable price.
D)It will be impossible to rent an apartment in either city at any price.

Question 48

Figure 4-1 shows Arnold's demand curve for burritos.

-Refer to Figure 4-1.If the market price is $1.50,what is Arnold's consumer surplus?

A)$1.50
B)$2.25
C)$3.00
D)$4.75

Question 49

Figure 4-2
Refer to Figure 4-2.What area represents producer surplus at a price of P2?

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

Question 50

Figure 4-1 shows Arnold's demand curve for burritos.

-Refer to Figure 4-1.What is the total amount that Arnold is willing to pay for 2 burritos?

A)$2.00
B)$4.50
C)$7.50
D)$10.00

Question 51

Figure 4-1 shows Arnold's demand curve for burritos.

-Refer to Figure 4-1.If the market price is $1.00,what is the maximum number of burritos that Arnold will buy?

A)1
B)2
C)3
D)4

Question 52

Suppliers will be willing to supply a product only if

A)the price received is less than the additional cost of producing the product.
B)the price received is at least equal to the additional cost of producing the product.
C)the price is higher than the average cost of producing the product.
D)the price received is at least double the additional cost of producing the product.

Question 53

Figure 4-1 shows Arnold's demand curve for burritos.

-Refer to Figure 4-1.What is the total amount that Arnold is willing to pay for 3 burritos?

A)$1.50
B)$6.00
C)$7.00
D)$10.00

Question 54

Figure 4-1 shows Arnold's demand curve for burritos.

-Refer to Figure 4-1.If the market price is $2.00,what is the consumer surplus on the first burrito?

A)$0.50
B)$1.00
C)$2.00
D)$7.50

Question 55

Figure 4-1 shows Arnold's demand curve for burritos.

-Refer to Figure 4-1.If the market price is $2.00,what is Arnold's consumer surplus?

A)$0.50
B)$1.00
C)$1.50
D)$3.00

Question 56

Figure 4-1 shows Arnold's demand curve for burritos.

-Refer to Figure 4-1.What is the total amount that Arnold is willing to pay for 4 burritos?

A)$1.00
B)$4.00
C)$7.00
D)$10.00

Question 57

In cities with rent control,people have an incentive to list their apartments on sites such as Airbnb at rents ________ the controlled rates,because rent control causes a ________ of apartments.

A)above;surplus
B)above;shortage
C)below;surplus
D)below;shortage

Question 58

Two economists from Northwestern University estimated the benefit households received from subscribing to broadband Internet service.The economists found that

A)the consumer surplus from dial-up Internet service exceeded the consumer surplus from broadband Internet service.
B)the average consumer of broadband Internet service received a marginal benefit equal to $36.
C)most consumers of broadband Internet service were not willing to pay more than $36 per month.
D)one month's benefit to consumers who subscribe to broadband Internet service is about $890 million.

Question 59

Figure 4-1 shows Arnold's demand curve for burritos.

-Refer to Figure 4-1.If the market price is $3.00,what is the maximum number of burritos that Arnold will buy?

A)0
B)2
C)3
D)4

Question 60

Figure 4-1 shows Arnold's demand curve for burritos.

-Refer to Figure 4-1.If the market price is $2.00,what is the consumer surplus on the second burrito?

A)$0
B)$1.00
C)$2.00
D)$4.50

Question 61

Table 4-5
$$\begin{array} { | l | l | } \hline \text { Consumer } & \text { Willingness to Pay } \\\hline \text { Violet } & \$ 48 \\\hline \text { Walter } & 40 \\\hline \text { Xavier } & 30 \\\hline \text { Yolanda } & 24 \\\hline \text { Zachary } & 14 \\\hline\end{array}$$

-Refer to Table 4-5.The table above lists the highest prices five consumers are willing to pay for a concert ticket.If the price of one ticket rises from $20 to $38

A)only three tickets will be sold.
B)consumer surplus decreases from $62 to $12.
C)consumer surplus increases from $88 to $142.
D)no one will buy a ticket.

Question 62

The maximum price that a buyer is willing to pay for a good measures his

A)consumer surplus.
B)marginal benefit.
C)willingness to pay.
D)producer surplus.

Question 63

Table 4-6
$$\begin{array} { | c | c | } \hline \begin{array} { c } \text { Marko's } \\\text { Polos }\end{array} & \begin{array} { c } \text { Marginal Cost } \\\text { (dollars) }\end{array} \\\hline 1 \text { st shirt } & \$ 7 \\\hline \text { 2nd shirt } & 10 \\\hline \text { 3rd shirt } & 15 \\\hline \text { 4th shirt } & 20 \\\hline\end{array}$$

-Refer to Table 4-6.The table above lists the marginal cost of polo shirts by Marko's,a firm that specializes in producing men's clothing.If the market price of Marko's polo shirts is $18

A)Marko's will produce four shirts.
B)producer surplus from the first shirt is $18.
C)producer surplus will equal $22.
D)there will be a surplus;as a result,the price will fall to $7.

Question 64

Table 4-4
$$\begin{array} { | l | c | } \hline \text { Consumer } & \text { Willingness to Pay } \\\hline \text { Curly } & \$ 50 \\\hline \text { Moe } & 30 \\\hline \text { Larry } & 15 \\\hline\end{array}$$

-Refer to Table 4-4.The table above lists the highest prices three consumers,Curly,Moe,and Larry,are willing to pay for a bottle of champagne.If the price of one of the bottles is $27 dollars,total consumer surplus will be

A)$0.
B)$14.
C)$26.
D)$53.

Question 65

The additional cost to a firm of producing one more unit of a good or service is the

A)minimum cost.
B)total cost.
C)opportunity cost.
D)marginal cost.

Question 66

Table 4-5
$$\begin{array} { | l | l | } \hline \text { Consumer } & \text { Willingness to Pay } \\\hline \text { Violet } & \$ 48 \\\hline \text { Walter } & 40 \\\hline \text { Xavier } & 30 \\\hline \text { Yolanda } & 24 \\\hline \text { Zachary } & 14 \\\hline\end{array}$$

-Refer to Table 4-5.The table above lists the highest prices five consumers are willing to pay for a concert ticket.If the price of one ticket is $50

A)everyone will buy a ticket.
B)consumer surplus will be maximized.
C)Violet's consumer surplus is $2.
D)no one will buy a ticket.

Question 67

Table 4-6
$$\begin{array} { | c | c | } \hline \begin{array} { c } \text { Marko's } \\\text { Polos }\end{array} & \begin{array} { c } \text { Marginal Cost } \\\text { (dollars) }\end{array} \\\hline 1 \text { st shirt } & \$ 7 \\\hline \text { 2nd shirt } & 10 \\\hline \text { 3rd shirt } & 15 \\\hline \text { 4th shirt } & 20 \\\hline\end{array}$$

-Refer to Table 4-6.The table above lists the marginal cost of polo shirts by Marko's,a firm that specializes in producing men's clothing.If the price of polo shirts increases from $15 to $20

A)consumers will buy no polo shirts.
B)the marginal cost of producing the third polo shirt will increase to $20.
C)producer surplus will rise from $13 to $28.
D)there will be a surplus of polo shirts.

Question 68

A consumer is willing to purchase a product up to the point where

A)he spends all of his income.
B)the marginal benefit is equal to the price of the product.
C)the quantity demanded is equal to the quantity supplied.
D)he is indifferent between consuming and saving.

Question 69

Marco goes to the pet store to buy a dozen Koi fish for his new Koi pond.He is willing to pay $200 for the dozen fish,but buys them for a total of $140.Marco's consumer surplus from the purchase is

A)$5.
B)$60.
C)$140.
D)$200.

Question 70

Table 4-4
$$\begin{array} { | l | c | } \hline \text { Consumer } & \text { Willingness to Pay } \\\hline \text { Curly } & \$ 50 \\\hline \text { Moe } & 30 \\\hline \text { Larry } & 15 \\\hline\end{array}$$

-Refer to Table 4-4.The table above lists the highest prices three consumers,Curly,Moe,and Larry,are willing to pay for a bottle of champagne.If the price of the champagne falls from $24 to $14

A)consumer surplus increases from $32 to $53.
B)Curly will buy four bottles;Moe will buy two bottles,and Larry will buy one bottle.
C)consumer surplus will increase from $80 to $95.
D)Larry and Moe will receive more consumer surplus than Curly.

Question 71

Which of the following statements best describes the concept of consumer surplus?

A)"I paid $89 for a microwave oven last week.This week the same store is selling the same microwave oven for $69."
B)"I sold my hard copy of Harry Potter and the Half-Blood Prince to a used book store for $10 even though I was willing to sell it for $5."
C)"Target was having a sale on tube socks so I bought 5 pairs."
D)"I was going to pay $200 for new sunglasses that I had seen at the Oakley store but I ended up paying only $140 for the same sunglasses."

Question 72

Table 4-5
$$\begin{array} { | l | l | } \hline \text { Consumer } & \text { Willingness to Pay } \\\hline \text { Violet } & \$ 48 \\\hline \text { Walter } & 40 \\\hline \text { Xavier } & 30 \\\hline \text { Yolanda } & 24 \\\hline \text { Zachary } & 14 \\\hline\end{array}$$

-Refer to Table 4-5.The table above lists the highest prices five consumers are willing to pay for a concert ticket.If the price of one of the tickets is $20

A)everyone will buy a ticket except for Zachary.
B)only Violet and Walter will buy tickets.
C)Xavier's consumer surplus is $50.
D)the total consumer surplus from the purchase of tickets will be $122.

Question 73

The additional benefit to a consumer from consuming one more unit of a good or service

A)is equal to consumer surplus.
B)is equal to the opportunity cost of consuming the good or service.
C)is equal to marginal benefit.
D)is equal to economic surplus.

Question 74

Brett buys a new cell phone for $100.He receives consumer surplus of $80 from the purchase.How much does Brett value his cell phone?

A)$180
B)$100
C)$80
D)$20

Question 75

Monique buys a new television for $795.She receives consumer surplus of $355 from the purchase.How much does Monique value her television?

A)$355
B)$440
C)$795
D)$1150

Question 76

Each point on a demand curve shows

A)the willingness of consumers to purchase a product at different prices.
B)the consumer surplus received from purchasing a given quantity of a product.
C)the economic surplus received from purchasing a given quantity of a product.
D)the legally determined maximum price that sellers may charge for a given quantity of a product.

Question 77

Table 4-5
$$\begin{array} { | l | l | } \hline \text { Consumer } & \text { Willingness to Pay } \\\hline \text { Violet } & \$ 48 \\\hline \text { Walter } & 40 \\\hline \text { Xavier } & 30 \\\hline \text { Yolanda } & 24 \\\hline \text { Zachary } & 14 \\\hline\end{array}$$

-Refer to Table 4-5.The table above lists the highest prices five consumers are willing to pay for a concert ticket.If the price of one ticket falls from $50 to $20

A)only three tickets will be sold.
B)consumer surplus decreases from $48 to $24.
C)consumer surplus increases from $0 to $62.
D)everyone will buy a ticket.

Question 78

Table 4-4
$$\begin{array} { | l | c | } \hline \text { Consumer } & \text { Willingness to Pay } \\\hline \text { Curly } & \$ 50 \\\hline \text { Moe } & 30 \\\hline \text { Larry } & 15 \\\hline\end{array}$$

-Refer to Table 4-4.The table above lists the highest prices three consumers,Curly,Moe,and Larry,are willing to pay for a bottle of champagne.If the price of one of the bottles is $95 dollars,total consumer surplus will be

A)$0.
B)$35.
C)$80.
D)$95.

Question 79

Table 4-4
$$\begin{array} { | l | c | } \hline \text { Consumer } & \text { Willingness to Pay } \\\hline \text { Curly } & \$ 50 \\\hline \text { Moe } & 30 \\\hline \text { Larry } & 15 \\\hline\end{array}$$

-Refer to Table 4-4.The table above lists the highest prices three consumers,Curly,Moe,and Larry,are willing to pay for a bottle of champagne.If the price of one of the bottles is $24 dollars

A)Curly will buy two bottles,Moe will buy one bottle and Larry will buy no bottles.
B)Curly will receive $26 of consumer surplus from buying one bottle.
C)Curly and Moe receive a total of $80 of consumer surplus from buying one bottle each.Larry will buy no bottles.
D)Larry will receive $15 of consumer surplus since he will buy no bottles.

Question 80

Table 4-5
$$\begin{array} { | l | l | } \hline \text { Consumer } & \text { Willingness to Pay } \\\hline \text { Violet } & \$ 48 \\\hline \text { Walter } & 40 \\\hline \text { Xavier } & 30 \\\hline \text { Yolanda } & 24 \\\hline \text { Zachary } & 14 \\\hline\end{array}$$

-Refer to Table 4-5.The table above lists the highest prices five consumers are willing to pay for a concert ticket.If the price of one of the tickets is $36

A)Violet and Walter will each buy two tickets.
B)Walter will receive $4 of consumer surplus from buying one ticket.
C)Violet and Walter receive a total of $52 of consumer surplus from buying one ticket each.No one else will buy a ticket.
D)Xavier,Yolanda,and Zachary will receive a total of $68 of consumer surplus since they will buy no tickets.