REAL ECON202 CHAPTER 4 QUIZ, COMPLETE SOLUTION 2024.

REAL ECON202 CHAPTER 4 QUIZ, COMPLETE SOLUTION 2024. increase; supply An increase in the consumer surplus in the market for milkshakes may result from a(n) _____ in the _____ of milkshakes. increase; supply increase; price decrease; demand decrease; supply will decrease If there is a decrease in demand, assuming a positively sloped supply curve and a negatively sloped demand curve, total surplus: will remain the same. may change, but we can't tell how. will increase. will decrease. the sum of the individual producer surpluses for all buyers of X. We can measure total producer surplus for good X as: the area below the supply curve for X and above the price of X. the area bounded by the supply curve for X and the two axes. the area between the demand curve for X and the supply curve for X. the sum of the individual producer surpluses for all buyers of X. increase consumer surplus and total surplus (Figure: Consumer and Producer Surplus) Look at the figure Consumer and Producer Surplus. An increase in supply will: increase consumer surplus and total surplus. increase total surplus. decrease producer surplus. increase consumer surplus. 50 (Figure: The Market for Hamburgers) The figure The Market for Hamburgers shows the weekly market for hamburgers in Irvine, Kentucky. If the price of burgers falls from $1.50 to $1.00, there is a loss in producer surplus. How much of the loss accrues because of the change in the quantity supplied? $45 $75 $90 $50 will increase Coffee and tea are substitutes in consumption. If there is an increase in the price of coffee, assuming a positively sloped supply curve and a negatively sloped demand curve, total surplus in the tea market: will not change. may change, but we cannot determine the change without more information. will increase. will decrease. a decrease If the supply curve of ice cream is upward-sloping and demand for it decreases, there will be _____ in producer surplus. an increase no change a decrease It's impossible to tell what will happen to producer surplus. none (Table: Willingness to Pay for Basketball Sneakers) The table Willingness to Pay for Basketball Sneakers shows each player's willingness to pay for basketball sneakers. Assume that each player wants to buy at most, one pair of sneakers. If the price of basketball sneakers is $180, how many pairs will be purchased? one none two three d the total surplus in a market is: a the net benefit to consumers, defined as the excess of consumer surplus over producer surplus. b the excess supply due to a price above the equilibrium price. c the surplus that accrues when a good is not scarce, defined as the total amount (if any) by which quantity supplied exceeds quantity demanded at a zero price. d the sum of consumer surplus and producer surplus. 240 Luis is willing to sell his pool table for no less than $600, but if he gets $840, the producer surplus Luis receives is: $240. $1,440. $840. $600. c Which of the following is a key factor in the effectiveness of well-functioning markets?