Deck 7: Consumers, Producers, and the Efficiency of Markets.

Question 1

Welfare economics is the study of

A) the well-being of less fortunate people.
B) welfare programs in the United States.
C) how the allocation of resources affects economic well-being.
D) the effect of income redistribution on work effort.

Answer 1

C

Question 2

Which of the Ten Principles of Economics does welfare economics explain more fully?

A) The cost of something is what you give up to get it.
B) Markets are usually a good way to organize economic activity.
C) Trade can make everyone better off.
D) A country's standard of living depends on its ability to produce goods and services.

Answer 2

B

Question 3

An example of positive analysis is studying

A) how market forces produce equilibrium.
B) whether equilibrium outcomes are fair.
C) whether equilibrium outcomes are socially desirable.
D) if income distributions are fair.

Answer 3

A

Question 4

Which of the following statements is correct?

A) Buyers always want to pay less and sellers always want to be paid more.
B) Buyers always want to pay less and sellers always want to be paid less.
C) Buyers always want to pay more and sellers always want to be paid more.
D) Buyers always want to pay more and sellers always want to be paid less.

Question 5

Willingness to pay

A) measures the value that a buyer places on a good.
B) is the amount a seller actually receives for a good minus the minimum amount the seller is willing to accept.
C) is the maximum amount a buyer is willing to pay minus the minimum amount a seller is willing to accept.
D) is the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.

Question 6

In which of the following circumstances would a buyer be indifferent about buying a good?

A) The amount of consumer surplus the buyer would experience as a result of buying the good is zero.
B) The price of the good is equal to the buyer's willingness to pay for the good.
C) The price of the good is equal to the value the buyer places on the good.
D) All of the above are correct.

Question 7

Welfare economics explains which of the following in the market for DVDs?

A) The government sets the price of DVDs; firms respond to the price by producing a specific level of output.
B) The government sets the quantity of DVDs; firms respond to the quantity by charging a specific price.
C) The market equilibrium price for DVDs maximizes the total welfare to DVD buyers and sellers.
D) The market equilibrium price for DVDs maximizes consumer welfare but minimizes producer welfare.

Question 8

A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it

A) maximizes both the total revenue for firms and the quantity supplied of the product.
B) maximizes the combined welfare of buyers and sellers.
C) minimizes costs and maximizes output.
D) minimizes the level of welfare payments.

Question 9

Welfare economics is the study of

A) taxes and subsidies.
B) how technology is best put to use in the production of goods and services.
C) government welfare programs for needy people.
D) how the allocation of resources affects economic well-being.

Question 10

Welfare economics is the study of how

A) the allocation of resources affects economic well-being.
B) a price ceiling compares to a price floor.
C) the government helps poor people.
D) a consumer's optimal choice affects her demand curve.

Question 11

The study of how the allocation of resources affects economic well-being is called

A) consumer economics.
B) macroeconomics.
C) willingness-to-pay economics.
D) welfare economics.

Question 12

An example of normative analysis is studying

A) how market forces produce equilibrium.
B) surpluses and shortages.
C) whether equilibrium outcomes are socially desirable.
D) income distributions.

Question 13

Suppose Raymond and Victoria attend a charity benefit and participate in a silent auction.Each has in mind a maximum amount that he or she will bid for an oil painting by a locally famous artist.This maximum is called

A) deadweight loss.
B) willingness to pay.
C) consumer surplus.
D) producer surplus.

Question 14

The maximum price that a buyer will pay for a good is called the

A) cost.
B) willingness to pay.
C) equity.
D) efficiency.

Question 15

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

A) factor markets.
B) energy markets.
C) welfare economics.
D) labor economics.

Question 16

The particular price that results in quantity supplied being equal to quantity demanded is the best price because it

A) maximizes costs of the seller.
B) maximizes tax revenue for the government.
C) maximizes the combined welfare of buyers and sellers.
D) minimizes the expenditure of buyers.

Question 17

A consumer's willingness to pay directly measures

A) the extent to which advertising and other external forces have influenced the consumer's preferences.
B) the cost of a good to the buyer.
C) how much a buyer values a good.
D) consumer surplus.

Question 18

Which of the Ten Principles of Economics does welfare economics explain more fully?

A) The cost of something is what you give up to get it.
B) Rational people think at the margin.
C) Markets are usually a good way to organize economic activity.
D) People respond to incentives.

Question 19

Suppose Larry,Moe,and Curly are bidding in an auction for a mint-condition video of Charlie Chaplin's first movie.Each has in mind a maximum amount that he will bid.This maximum is called

A) a resistance price.
B) willingness to pay.
C) consumer surplus.
D) producer surplus.

Question 20

When a buyer's willingness to pay for a good is equal to the price of the good,the

A) buyer's consumer surplus for that good is maximized.
B) buyer will buy as much of the good as the buyer's budget allows.
C) price of the good exceeds the value that the buyer places on the good.
D) buyer is indifferent between buying the good and not buying it.

Question 21

Consumer surplus in a market can be represented by the

A) area below the demand curve and above the price.
B) distance from the demand curve to the horizontal axis.
C) distance from the demand curve to the vertical axis.
D) area below the demand curve and above the horizontal axis.

Question 22

Consumer surplus is

A) the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.
B) the amount a buyer is willing to pay for a good minus the cost of producing the good.
C) the amount by which the quantity supplied of a good exceeds the quantity demanded of the good.
D) a buyer's willingness to pay for a good plus the price of the good.

Question 23

Consumer surplus

A) is closely related to the supply curve for a product.
B) is represented by a rectangle on a supply-demand graph when the demand curve is a straight, downward-sloping line.
C) is measured using the demand curve for a product.
D) does not reflect economic well-being in most markets.

Question 24

Table 7-2
This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke.

Refer to Table 7-2.Which of the following is not true?

A) At a price of $9.00, no buyer is willing to purchase Vanilla Coke.
B) At a price of $5.50, Megan is indifferent between buying a case of Vanilla Coke and not buying one.
C) At a price of $4.00, total consumer surplus in the market will be $9.00.
D) All of the above are correct.

Question 25

Table 7-1

Refer to Table 7-1.If the price of the product is $22,then who would be willing to purchase the product?

A) Lori
B) Lori and Audrey
C) Lori, Audrey, and Zach
D) Lori, Audrey, Zach, and Calvin

Question 26

Table 7-1

Refer to Table 7-1.If the price of the product is $51,then who would be willing to purchase the product?

A) Lori
B) Lori and Audrey
C) Lori, Audrey, and Zach
D) no one

Question 27

Table 7-2
This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke.

Refer to Table 7-2.If the market price is $5.50,the consumer surplus in the market will be

A) $3.00.
B) $4.50.
C) $15.50.
D) $21.00.

Question 28

A demand curve reflects each of the following except the

A) willingness to pay of all buyers in the market.
B) value each buyer in the market places on the good.
C) highest price buyers are willing to pay for each quantity.
D) ability of buyers to obtain the quantity they desire.

Question 29

Consumer surplus

A) is the amount of a good that a consumer can buy at a price below equilibrium price.
B) is the amount a consumer is willing to pay minus the amount the consumer actually pays.
C) is the number of consumers who are excluded from a market because of scarcity.
D) measures how much a seller values a good.

Question 30

On a graph,consumer surplus is represented by the area

A) between the demand and supply curves.
B) below the demand curve and above price.
C) below the price and above the supply curve.
D) below the demand curve and to the right of equilibrium price.

Question 31

Consumer surplus is the

A) amount of a good consumers get without paying anything.
B) amount a consumer pays minus the amount the consumer is willing to pay.
C) amount a consumer is willing to pay minus the amount the consumer actually pays.
D) value of a good to a consumer.

Question 32

Table 7-1

Refer to Table 7-1.If price of the product is $30,then the total consumer surplus is

A) $-10.
B) $-6.
C) $20.
D) $30.

Question 33

Consumer surplus is

A) a concept that helps us make normative statements about the desirability of market outcomes.
B) represented on a graph by the area below the demand curve and above the price.
C) a good measure of economic welfare if buyers' preferences are the primary concern.
D) All of the above are correct.

Question 34

Table 7-2
This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke.

Refer to Table 7-2.If the price of Vanilla Coke is $6.90,who will purchase the good?

A) all five individuals
B) Megan, Mallory and Audrey
C) David, Laura and Megan
D) David and Laura

Question 35

Table 7-1

Refer to Table 7-1.If the price of the product is $18,then the total consumer surplus is

A) $38.
B) $42.
C) $46.
D) $72.

Question 36

Consumer surplus

A) is the amount a buyer pays for a good minus the amount the buyer is willing to pay for it.
B) is represented on a supply-demand graph by the area below the price and above the demand curve.
C) measures the benefit sellers receive from participating in a market.
D) measures the benefit buyers receive from participating in a market.

Question 37

In a market,the marginal buyer is the buyer

A) whose willingness to pay is higher than that of all other buyers and potential buyers.
B) whose willingness to pay is lower than that of all other buyers and potential buyers.
C) who is willing to buy exactly one unit of the good.
D) who would be the first to leave the market if the price were any higher.

Question 38

On a graph,the area below a demand curve and above the price measures

A) producer surplus.
B) consumer surplus.
C) deadweight loss.
D) willingness to pay.

Question 39

Table 7-1

Refer to Table 7-1.If the price of the product is $15,then who would be willing to purchase the product?

A) Lori
B) Lori and Audrey
C) Lori, Audrey, and Zach
D) Lori, Audrey, Zach, and Calvin

Question 40

Consumer surplus is equal to the

A) Value to buyers - Amount paid by buyers.
B) Amount paid by buyers - Costs of sellers.
C) Value to buyers - Costs of sellers.
D) Value to buyers - Willingness to pay of buyers.

Question 41

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 Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day.

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 $2.50.
B) decreases by $0.80.
C) decreases by $2.60.
D) decreases by $3.40.

Question 42

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 Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day.

Refer to Table 7-5.The market quantity of oranges demanded per day is exactly 5 if the price of an orange,P,satisfies

A) $1.00 < P < $1.50.
B) $0.80 < P < $1.50.
C) $0.80 < P < $1.00.
D) $0.75 < P < $0.80.

Question 43

Table 7-3
The only four consumers in a market have the following willingness to pay for a good:

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.

Question 44

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 Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day.

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) 7.
D) 9.

Question 45

Table 7-3
The only four consumers in a market have the following willingness to pay for a good:

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.

Question 46

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 Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day.

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.

Question 47

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 Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day.

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.

Question 48

Table 7-2
This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke.

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.

Question 49

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.

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

Question 50

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.

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

Question 51

Table 7-3
The only four consumers in a market have the following willingness to pay for a good:

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.

Question 52

Table 7-3
The only four consumers in a market have the following willingness to pay for a good:

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

Question 53

Table 7-3
The only four consumers in a market have the following willingness to pay for a good:

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.
D) $45 or slightly less.

Question 54

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.

Refer to Table 7-4.If tickets sell for $20 each,then what is the total consumer surplus in the market?

A) $5
B) $30
C) $40
D) $75

Question 55

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.

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) $21
B) $26
C) $51
D) $61

Question 56

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 Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day.

Refer to Table 7-5.If the market price of an orange is $1.20,then the market quantity of oranges demanded per day is

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

Question 57

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.

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

Question 58

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 Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day.

Refer to Table 7-5.If the market price of an orange increases from $0.60 to $1.05,then consumer surplus

A) increases by $2.90.
B) decreases by $2.25.
C) decreases by $2.70.
D) decreases by $3.85.

Question 59

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 Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day.

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 $4.45.
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 $5.35.
D) 7 oranges are demanded per day, and consumer surplus amounts to $5.50.

Question 60

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 Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day.

Refer to Table 7-5.If the market price of an orange is $1.20,then consumer surplus amounts to

A) $0.70.
B) $1.10.
C) $1.40.
D) $5.00.

Question 61

Kelly is willing to pay $68 for a pair of shoes for a wedding.She finds a pair at her favorite outlet shoe store for $58.Kelly's consumer surplus is

A) $10.
B) $28.
C) $58.
D) $68.

Question 62

Table 7-6

Refer to Table 7-6.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

Question 63

Table 7-6

Refer to Table 7-6.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)

Question 64

Suppose Katie,Kendra,and Kristen each purchase a particular type of cell phone at a price of $80.Katie's willingness to pay was $100,Kendra's willingness to pay was $95,and Kristen's willingness to pay was $80.Which of the following statements is correct?

A) For the three individuals together, consumer surplus amounts to $35.
B) Having bought the cell phone, Kristen is better off than she would have been had she not bought it.
C) Had the price of the cell phone been $95 rather than $80, Katie and Kendra definitely would have been buyers and Kristen definitely would not have been a buyer.
D) The fact that all three individuals paid $80 for the same type of cell phone indicates that each one placed the same value on that cell phone.

Question 65

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 Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day.

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.

Question 66

Suppose Lauren,Leslie and Lydia all purchase bulletin boards for their rooms for $15 each.Lauren's willingness to pay was $35,Leslie's willingness to pay was $25,and Lydia's willingness to pay was $30.Total consumer surplus for these three would be

A) $15.
B) $30.
C) $45.
D) $90.

Question 67

Table 7-6

Refer to Table 7-6.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

Question 68

Table 7-6

Refer to Table 7-6.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

Question 69

Suppose Brent,Callie,and Danielle each purchase a particular type of electric pencil sharpener at a price of $20.Brent's willingness to pay was $22,Callie's willingness to pay was $25,and Danielle's willingness to pay was $30.Which of the following statements is correct?

A) Had the price of the pencil sharpener been $24 rather than $20, only Danielle would have been a buyer.
B) Brent's consumer surplus is the smallest of the three individual consumer surpluses.
C) For the three individuals together, consumer surplus amounts to $60.
D) The fact that all three individuals paid $20 for the same type of pencil sharpener indicates that each one placed the same value on that pencil sharpener.

Question 70

Table 7-6

Refer to Table 7-6.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

Question 71

Chuck would be willing to pay $20 to attend a dog show,but he buys a ticket for $15.Chuck values the dog show at

A) $5.
B) $15.
C) $20.
D) $35.

Question 72

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.

Question 73

Table 7-6

Refer to Table 7-6.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

Question 74

Josh is willing to pay $40 for a haircut,but he is able to pay $25 at the local salon.His consumer surplus is

A) $0 because the cost exceeds his maximum willingness to pay.
B) $15.
C) $25.
D) $65.

Question 75

If a consumer places a value of $15 on a particular good and if the price of the good is $17,then the

A) consumer has consumer surplus of $2 if he or she buys the good.
B) consumer does not purchase the good.
C) market is not a competitive market.
D) price of the good will fall due to market forces.

Question 76

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

Question 77

Brock is willing to pay $400 for a new suit,but he is able to buy the suit for $350.His consumer surplus is

A) $50.
B) $150.
C) $350.
D) $400.

Question 78

If a consumer places a value of $20 on a particular good and if the price of the good is $25,then the

A) consumer has consumer surplus of $5 if he buys the good.
B) consumer does not purchase the good.
C) price of the good will rise due to market forces.
D) market is out of equilibrium.

Question 79

Table 7-6

Refer to Table 7-6.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

Question 80

If a consumer is willing and able to pay $20 for a particular good and if he pays $16 for the good,then for that consumer,consumer surplus amounts to

A) $4.
B) $16.
C) $20.
D) $36.