Question 1

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers increased from $7 to $11:

Accepted Answer

A)   more producers would participate in the market.
B)   only Bob's Hardware would lose surplus.
C)   both Bob's Hardware and Lace Hardware would lose surplus.
D)   House Depot is the only producer that would gain surplus.E) B) and C)
F) C) and D)

Question 2

1) . If the supply curve shifts to S2, and a new equilibrium is reached, producer surplus will: A)  increase by $90. B)  increase by $120. C)  decrease by $20. D)  decrease by $30." class="answers-bank-image d-inline" rel="preload" > Assume the market in the graph is in equilibrium at demand (D)  and supply (S1) . If the supply curve shifts to S2, and a new equilibrium is reached, producer surplus will:

Accepted Answer

A)   increase by $90.
B)   increase by $120.
C)   decrease by $20.
D)   decrease by $30.E) A) and D)
F) A) and B)

Question 3

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers decreased from $15 to $13, which of the following can be said with certainty?

Accepted Answer

A)   Bob's Hardware would no longer participate in the market.
B)   Total producer surplus would decrease.
C)   Only Bob's Hardware would experience a drop in producer surplus.
D)   Bob's Hardware would continue to participate in the market.E) C) and D)
F) A) and B)

Question 4

Assume the market depicted in the graph is in equilibrium. What is consumer surplus?

Accepted Answer

A)   $20
B)   $30
C)   $50
D)   $60E) A) and B)
F) A) and C)

Question 5

Assume a market price is set artificially high. In other words, the price is set above the equilibrium price. How will this affect the market?

Accepted Answer

A)   Every consumer loses surplus, and it all gets transferred to producers.
B)   Every producer gains surplus, due to the higher price now being charged.
C)   Some consumers drop out of the market, and those left lose some surplus.
D)   None of these are correct.E) A) and B)
F) All of the above

Exam 5: Efficiency

Assume the market in the graph is in equilibrium at demand (D) and supply (S₁) . If the supply curve shifts to S₂, and a new equilibrium is reached, producer surplus will:

Correct Answer
verified

Assume a market price is set artificially high. In other words, the price is set above the equilibrium price. How will this affect the market?

Correct Answer
verified

Correct Answer
verified

Assume the market depicted in the graph is in equilibrium. What is consumer surplus?

Correct Answer
verified

Correct Answer
verified

Exam 5: Efficiency

Assume the market in the graph is in equilibrium at demand (D) and supply (S1) . If the supply curve shifts to S2, and a new equilibrium is reached, producer surplus will:

Correct AnswerverifiedShow Answer

Assume a market price is set artificially high. In other words, the price is set above the equilibrium price. How will this affect the market?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assume the market depicted in the graph is in equilibrium. What is consumer surplus?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assume the market in the graph is in equilibrium at demand (D) and supply (S₁) . If the supply curve shifts to S₂, and a new equilibrium is reached, producer surplus will:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified