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Chapter 6
Economics
| Question | Answer |
|---|---|
| Consumer Willingness to Pay Anya $24 Basil 20 Celeste 15 Dralon 12 Esther 7 The table above lists the highest prices five consumers are willing to pay for a theater ticket. If the price of one of the tickets is $18 | Basil will receive $2 of consumer surplus from buying one ticket |
| Consumer Willingness to Pay Anya $24 Basil 20 Celeste 15 Dralon 12 Esther 7 The table above lists the highest prices five consumers are willing to pay for a theater ticket. If the price of one ticket is $25 | no one will buy a ticket |
| demand curve shows | the willingness of consumers to buy a product at different prices |
| Arthur buys a new cell phone for $150. He receives consumer surplus of $150 from the purchase. How much does Arthur value his cell phone? | $300 |
| Frieda is at her local florist to buy a dozen roses. She is willing to pay $75 for the roses, and buys them for $75. Frieda's consumer surplus from the purchase is | $0 |
| Marginal benefit is equal to the ________ benefit to a consumer receives from consuming one more unit of a good or service | additional |
| Paul goes to Sportsmart to buy a new tennis racquet. He is willing to pay $200 for a new racquet, but buys one on sale for $125. Paul's consumer surplus from the purchase is | $75 |
| The total amount of producer surplus in a market is equal to the area below the supply curve | False |
| The Waco Kid's Cowboy Hats Marginal Cost (dollars) 1st hat $24 2nd hat 30 3rd hat 38 4th hat 46 If the market price of cowboy hats is $50, how many hats will be produced? | 4 |
| The Waco Kid's Cowboy Hats Marginal Cost (dollars) 1st hat $24 2nd hat 30 3rd hat 38 4th hat 46 If the market price of cowboy hats is $35, The Waco Kid will produce | 2 hats |
| The difference between the ________ and the ________ from the sale of a product is called producer surplus | lowest price a firm would have been willing to accept; price it actually receives |
| Marginal cost is | the additional cost to a firm of producing one more unit of a good or service |
| Suppliers will be willing to supply a product only if | the price received is at least equal to the additional cost of producing the product |
| Marginal cost is the additional cost to a firm of producing one more unit of a good or service | True |
| Producer surplus is the difference between the lowest price a firm is willing to accept for a product and the price it actually receives for the product | True |
| A ________ curve shows the marginal cost of producing one more unit of a good or service | supply |
| Marginal cost is the additional cost to a firm of producing one more unit of a good or service | True |
| The area ________ the market supply curve and ________ the market price is equal to the total amount of producer surplus in a market | above; below |
| Suppliers will be willing to supply a product only if | the price received is at least equal to the additional cost of producing the product. |
| The Waco Kid's Cowboy Hats Marginal Cost (dollars) 1st hat $24 2nd hat 30 3rd hat 38 4th hat 46 If the market price of cowboy hats is $35, The Waco Kid will produce | 2 hats |
| The total amount of producer surplus in a market is equal to | the area above the market supply curve and below the market price |
| The difference between the ________ and the ________ from the sale of a product is called producer surplus | lowest price a firm would have been willing to accept; price it actually receives |
| Consumer surplus measures the net benefit from participating in a market | True |
| Consumer Willingness to Pay Anya $24 Basil 20 Celeste 15 Dralon 12 Esther 7 If the price of one ticket falls from $25 to $10 | consumer surplus increases from $0 to $31 |
| The Waco Kid's Cowboy Hats Marginal Cost (dollars) 1st hat $24 2nd hat 30 3rd hat 38 4th hat 46 If the market price of The Waco Kid's cowboy hats is $40 | producer surplus will equal $28 |
| In a competitive market the demand curve shows the ________ received by consumers and the supply curve shows the ________. | marginal benefit; marginal cost |
| Economic surplus | is equal to the sum of consumer surplus and producer surplus |
| In a competitive market equilibrium | the marginal benefit equals the marginal cost of the last unit sold |
| ________ is maximized in a competitive market when marginal benefit equals marginal cost | Economic surplus |
| The following equations represent the demand and supply for silver pendants. QD = 50 - 2P QS = -10 + 2P What is the equilibrium price (P) and quantity (Q - in thousands) of pendants | P = $15; Q = 20 thousand |
| If the price of hairspray is represented by equation P = 10 - 0.2 QD, then the corresponding quantity of hairspray demanded is represented by the equation | QD = 50 -5P |
| If the quantity of fishing poles demanded is represented by the equation QD = 60 - P then the corresponding price of fishing poles is represented by the equation | P = 60 - QD |
| Demand Supply P = 80 - QD P = 50 + 1/2 QS QD = 80 - P QS = 2P - 100 What are the equilibrium price and quantity (in thousands) for Chef Ernie's sushi | $60 and 20 thousand |
| If the price of chewing gum is represented by equation P = 25 - 0.5 QD, then the corresponding quantity of chewing gum demanded is represented by the equation | QD = 50 -2P |
| If, in a competitive market, marginal benefit is less than marginal cost | the quantity sold is greater than the equilibrium quantity |
| ________ refers to the reduction in economic surplus resulting from not being in competitive equilibrium | Deadweight Loss |
| Economic efficiency is defined as a market outcome in which the marginal benefit to consumers of the last unit produced is equal to the marginal cost of production, and in which | the sum of consumer surplus and producer surplus is at a maximum |
| Economic efficiency in a competitive market is achieved when | the marginal benefit equals the marginal cost from the last unit sold |
| Economic efficiency is defined as a market outcome in which the marginal benefit to consumers of the last unit produced is equal to the marginal cost of production, and in which | the sum of consumer surplus and producer surplus is at a maximum |
| If there is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and consumer surplus plus producer surplus is maximized, then | economic efficiency is achieved |
Created by:
annalise123