Question : Table 4-1 Consumer Willingness to Pay Tom : 1267064

 

Table 4-1

 

Consumer

Willingness to Pay

Tom

$40

Dick

  30

Harriet

  25

 

11) 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.

12) 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.

13) 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.

 

Table 4-2

 

The Waco Kid’s Cowboy Hats

Marginal Cost

(dollars)

1st hat

$24

2nd hat

  30

3rd hat

  38

4th hat

  46

 

14) Refer to Table 4-2.  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.

15) Refer to Table 4-2. 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.

16) 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

17) 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.

18) 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

19) 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.

20) 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