Question : Table 4-3 The Waco Kid’s Cowboy Hats Marginal Cost (dollars) : 1387427

 

 

Table 4-3

 

The Waco Kid’s Cowboy Hats

Marginal Cost

(dollars)

1st hat

$24

2nd hat

30

3rd hat

38

4th hat

46

 

21) Refer to Table 4-3.  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.

 

 

22) Refer to Table 4-3.  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.

 

23) Refer to Table 4-3.  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 cowboy hats is $35, The Waco Kid will produce

A) 1 hat.

B) 2 hats.

C) 3 hats.

D) 4 hats.

 

 

24) Refer to Table 4-3.  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 cowboy hats is $50, how many hats will be produced?

A) 0

B) 1

C) 2

D) 4

 

 

25) Refer to Table 4-3.  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 cowboy hats is $50, producer surplus is

A) $0.

B) $4.

C) $62.

D) $138.

 

26) Refer to Table 4-3.  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 decreases from $38 to $30,

A) consumer surplus will rise by $6.

B) the marginal cost of producing the third cowboy hat will fall to $30.

C) producer surplus will fall from $22 to $6.

D) producer surplus will rise from $8 to $24.

 

 

27) 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

 

 

28) 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.

 

 

29) 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

 

30) 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.