Question : 21) When the price rises and the supply curve does : 1226489

21) When the price rises and the supply curve does not shift, the firms’ producer surplus ________. When the price falls and the supply curve does not shift, the firms’ producer surplus ________.

A) increases; decreases

B) decreases; increases

C) decreases; decreases

D) increases; increases

E) does not change; does not change

22) The producer surplus of making and selling 10 chairs is found by

A) multiplying the selling price by 10.

B) subtracting the marginal cost from the selling price for each chair and summing the differences for all 10 chairs.

C) subtracting from the total revenue the cost of producing one chair multiplied by 10.

D) adding the marginal cost and the price of all 10 chairs.

E) None of the above answers is correct.

23) Producer surplus

A) increases if market price rises and the supply curve does not shift.

B) decreases if market price rises and the supply curve does not shift.

C) is equal to the maximum price consumers are willing to pay.

D) is the same as the marginal cost.

E) always must equal consumer surplus.

24) Hester owns an ice cream shop. It costs her $2 per cone to make 10 ice cream cones. If she sells 10 cones for $4 each, her producer surplus on the 10 cones is equal to

A) $2.

B) $20.

C) $10.

D) $40.

E) $4.

25) If a firm produces five chairs with marginal costs of $25, $30, $40, $55, and $75, respectively, and sells them for $80 each, what is the firm’s total producer surplus?

A) $400

B) $225

C) $175

D) $150

E) $80

26) The price of a cowboy hat is $100. Willie can produce a hat at a marginal cost of $130, Waylon can produce at a marginal cost of $100, and Merle can produce at a marginal cost of $85. Which of the following statements is correct?

A) The sum of producer surplus is $15.

B) All three of these sellers will gain producer surplus from selling a hat.

C) The sum of producer surplus is $30.

D) Willie’s producer surplus is $30.

E) The sum of producer surplus is $45.

27) Graphically, producer surplus is the area under the

A) demand curve and above the supply curve, up to the relevant quantity.

B) price and above the demand curve, up to the relevant quantity.

C) price and above the supply curve, up to the relevant quantity.

D) price and above the quantity axis, up to the relevant quantity.

E) demand curve and above the price, up to the relevant quantity.

28) Bill and Krista sell potted plants from a roadside stand. The figure above shows Bill and Krista’s marginal cost curve and the market price. If Bill and Krista sell 60 plants per week, their producer surplus from the 60th plant will equal

A) $8.

B) $480.

C) $0.

D) $20.

E) More information is needed to answer the question.

29) The figure above shows the supply curve for soda. The market price is $1.00 per soda. The marginal cost of the 10,000th soda is

A) $0.00.

B) $0.50.

C) $1.00.

D) more than $0.50 and less than $1.00.

E) None of the above answers is correct.

30) The figure above shows the supply curve for soda. The market price is $1.00 per soda. The marginal cost of the 20,000th soda is

A) $0.00.

B) $0.50.

C) $1.00.

D) more than $1.00.

E) None of the above answers is correct.