Which one of the following statement is incorrect? O A. The difference between the lowest price at which producers are willing to supply a product and the price they actually receive is known as the producer surplus O B. The producer surplus is depicted by the area below the demand curve and above the market price. O C. The value between what consumers pay and the maximum value that they are willing to pay for a product is known as the consumer surplus O D. To determine consumer surplus, one must have knowledge of the market price of a particular product

les of Microeconomics Spring20 fall20 Consumer surplus is the Select one: O A. price of a good expressed in dollars. O B. value of a good expressed in dollars. on O C. value of a good plus the price paid for it summed over the quantity bought. O D. value of a good minus the price paid for it summed over the quantity bought.

The graph shows the demand curve for textbooks. Suppose the price of a textbook is $150. Draw an arrow that shows the consumer surplus on the 1 millionth textbook bought. Consumer surplus is O A. equal to the amount that we pay for a good or service O B. greater on the 100th unit of a good that we buy than on the 1st unit of a good that we buy O C. the value that we receive by purchasing a good or service O D. measured as the marginal benefit (or value) of a good minus the price paid for it, summed over the quantity bought 250- 200- 150- 100- 50- 0- Price (dollars per textbook) Market price D = MSB o 2 3 5 Quantity (millions of textbooks per year) >>> Draw only the objects specified in the question. Q

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Which of the following statements is false regarding Producer Surplus? Time le O a. Producer surplus is the net economic benefit received by producers O b. Producer surplus is the difference between market price and marginal cost O c. Producer surplus is maximum under unregulated markets when there are sales taxes Od. Producer surplus is the area below the market price and above the supply curve Oe. Producer surplus is the difference between the total surplus and consumer surplus

In Canada we have government intervention in the dairy market in the form of quotas on milk production. What are two predicted economic effects of this policy? O a. An equitable distribution of income between dairy farmers and consumers of dairy products and a reduction in the total amount of economic surplus in the dairy market. O b. A redistribution of income from dairy farmers to consumers of dairy products and an increase in the total amount of economic surplus in the dairy market. Oc. A redistribution of income from dairy farmers to consumers of dairy products and a reduction in the total amount of economic surplus in the dairy market. Od. A redistribution of income from consumers of dairy products to dairy farmers and a reduction in the total amount of economic surplus in the dairy market. O e. A redistribution of income from consumers of dairy products to dairy farmers and a reduction in deadweight loss in the dairy market. Next page

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The supply curve in a market is given by P = 3 + 2Q; demand is given by P = 11 - 2Q. Suppose a per-unit tax of £1 is levied on the sellers. The price consumers pay will and the consumer surplus will Select one: O a. O b. Increase by 1; decrease Decrease by more than 1; Increase O c. Decrease by 1; remain unchanged O d. Increase by less than 1; Decrease

Jamdung Airlines has been offering free giveaways for the past two months. If a consumer buys one ticket he can get another half off plus a free inflight cocktail. The behaviour of the airline can be explained by: Select one: O a. The airline is heavily taxed. O b. The existence of a price floor in the market. O . The existence of a price ceiling in the market. O d. The airline has imposed a supply restriction. O e. The airline is making more than enough profits.

Refer to Figure 7-2. At the equilibrium price, consumer surplus is O a $1,600 O b. $1,400. O $700 Od 1800 180 150 120 110 PRICE 90 28 2 6 10 15 QUANTITY 20 25 Supply Demand 30