Chapter 4

Question 1

We can measure the total consumer surplus for yogurt as the

Answer 1

Some of the individual consumer surplus is of all buyers of yogurt

Question 2

The total consumer surplus for yogurt cannot be calculated as the area bounded by the demand curve for yogurt and the two axes

Answer 2

True

Question 3

We can measure the total producer surplus for yogurt as the

Answer 3

Some of the individual producer surplus of all the buyers of yogurt

Question 4

Suppose the government believes that the price of gasoline is too high, and therefore intervenes in the market by setting a price ceiling that is below the equilibrium price. Which scenario would not occur?

Answer 4

The outcome would be efficient

Question 5

A monopolist prevents mutually beneficial traits from occurring by virtue of

Answer 5

It’s market power

Question 6

If the price of a good exceeds the competitive equilibrium price then

Answer 6

Firms produce more than efficient quantity

Question 7

There is a trade off between—— and efficiency in the policies designed to promote equity often, the cost of——-efficiency

Answer 7

Equity, decreased

Question 8

Violet and Allegra or shopping together at the mall for a new pair of shoes. Violet is willing to pay $90 and Allegra is willing to pay $50 for a pair of shoes if the price of shoes is $59. How much total consumer surplus do they receive?

Answer 8

$31

Question 9

Total surplus is

Answer 9

The sum of consumer and producer surplus

Question 10

Assume gasoline in cars are compliments in consumption. If the price of gasoline rises the producer surplus of auto manufacturers.

Answer 10

Will decrease

Question 11

Supposed to pay $14 to see George Clooney and his next movie and that Mr. Clooney receives 40 million for appearing in it. This means that.

Answer 11

You and George Clooney benefit from this transaction

Question 12

If you pay a price exactly equal to your willingness to pay, then your consumer surplus is

Answer 12

Zero

Question 13

A competitive market pushes the quantity produced to it efficient level

Answer 13

True

Question 14

Consumer surplus for an individual buyer is equal to the

Answer 14

Consumers willingness to pay for the good minus the price paid for the good

Question 15

Total surplus generated in the market for blackberries is the total net gain to Consumers in that Market

Answer 15

False