Question : 5.3  From the Buyer’s Problem to the Demand Curve 1) Willingness : 1377348

 

5.3  From the Buyer’s Problem to the Demand Curve

 

1) Willingness to pay:

A) is the lowest price that a buyer is willing and able to pay for a unit of good.

B) is the highest price that a buyer is willing and able to pay for a unit of good.

C) is equal to the price of the lowest-priced goods in a consumption bundle.

D) is equal to the price of the highest-priced goods in a consumption bundle.

 

2) As the ________ increases, ________.

A) quantity demanded of a good; its price increases

B) quantity demanded of a good; its price decreases

C) price of a good; its quantity demanded increases

D) price of a good; its quantity demanded decreases

 

5.4  Consumer Surplus

 

1) ________ is the difference between the willingness to pay and the price paid for a good.

A) Producer surplus

B) Consumer surplus

C) Seller’s profit

D) Revenue

 

2) John is ready to pay $5 for an extra loaf of bread. Due to an ongoing discount in the store, he gets a loaf for $2. John’s consumer surplus from the purchase is ________.

A) $2

B) $2.5

C) $3

D) $10

3) Which of the following statements correctly differentiates between consumer surplus and net benefits?

A) Consumer surplus at different levels of consumption can be calculated arithmetically, whereas net benefits at different levels of consumption cannot be estimated.

B) Consumer surplus at different levels of consumption cannot be estimated, whereas net benefits at different levels of consumption can be calculated arithmetically.

C) Consumer surplus measures difference between willingness to pay for a good and its price, whereas net benefits measure the overall satisfaction gained from consumption of a good.

D) Consumer surplus equals the overall satisfaction gained from consumption of a good, whereas net benefits measure the difference between willingness to pay for a good and its price.

 

4) If the price of a good increases, ________.

A) the budget constraint shifts outward

B) the budget constraint shifts inward

C) the consumer surplus increases

D) the consumer surplus decreases

The following figure illustrates the market demand curve for wine.

5) Refer to the figure above. What is the market-wide consumer surplus when the market price of wine is $9?

A) $180,000

B) $90,000

C) $60,000

D) $210,000

 

6) Refer to the figure above. What is the market-wide consumer surplus when the market price of wine is $18?

A) $36,000

B) $3,000

C) $45,000

D) $210,000

 

7) Refer to the figure above. What is the loss in the market-wide consumer surplus when the price of wine changes from $9 to $18?

A) $144,000

B) $30,000

C) $57,000

D) $0

The following figure shows the market demand curve for calculators.

 

 

8) Refer to the figure above. What is the market-wide consumer surplus when the market price of calculators is $6?

A) $20

B) $35

C) $50

D) $70

 

9) Refer to the figure above. What is the market-wide consumer surplus when the market price of calculators is $3?

A) $600

B) $725

C) $1,000

D) $1,120

 

10) Refer to the figure above. What is the gain in the market-wide consumer surplus when the price of calculators changes from $6 to $3?

A) $565

B) $580

C) $950

D) $1050