Chapter 7/Consumers, Producers, and the Efficiency of Markets ? 469

Table 7-2

This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. Buyer Willingness To Pay David $8.50 Laura $7.00 Megan $5.50 Mallory $4.00 Audrey $3.50 23. Refer to Table 7-2. If the price of Vanilla Coke is $6.90, who will purchase the good?

a. all five individuals

b. Megan, Mallory and Audrey c. David, Laura and Megan d. David and Laura

ANS: D

NAT: Analytic MSC: Applicative

DIF: 2 REF: 7-1 LOC: Supply and demand

TOP: Willingness to pay

24. Refer to Table 7-2. Which of the following is not true?

a. At a price of $9.00, no buyer is willing to purchase Vanilla Coke.

b. At a price of $5.50, Megan is indifferent between buying a case of Vanilla Coke and not buying

one.

c. At a price of $4.00, total consumer surplus in the market will be $9.00. d. All of the above are correct.

ANS: D

NAT: Analytic MSC: Applicative

DIF: 2 REF: 7-1 LOC: Supply and demand

TOP: Consumer surplus

25. Refer to Table 7-2. If the market price is $5.50, the consumer surplus in the market will be

a. $3.00. b. $4.50. c. $15.50. d. $21.00.

ANS: B

NAT: Analytic MSC: Applicative

DIF: 2 REF: 7-1 LOC: Supply and demand

TOP: Consumer surplus

26. Refer to Table 7-2. If the market price is $3.80,

a. David’s consumer surplus is $4.70 and total consumer surplus for the five individuals is $9.50. b. Megan’s consumer surplus is $1.70 and total consumer surplus for the five individuals is $9.80. c. David, Laura, and Megan will be the only buyers of Vanilla Coke.

d. the demand curve for Vanilla Coke, taking the five individuals into account, is horizontal.

ANS: B

NAT: Analytic MSC: Applicative

DIF: 2 REF: 7-1 LOC: Supply and demand

TOP: Consumer surplus

470 ? Chapter 7/Consumers, Producers, and the Efficiency of Markets

Table 7-3

The only four consumers in a market have the following willingness to pay for a good:

Buyer Carlos Quilana Wilbur Ming-la Willingness to Pay $15 $25 $35 $45 27. Refer to Table 7-3. If the market price for the good is $30, who will purchase the good?

a. Carlos only

b. Carlos and Quilana only

c. Carlos, Quilana, and Wilbur only d. Wilbur and Ming-la only

ANS: D

NAT: Analytic MSC: Applicative

DIF: 2 REF: 7-1 LOC: Supply and demand

TOP: Willingness to pay

28. Refer to Table 7-3. If there is only one unit of the good and if the buyers bid against each other for the right

to purchase it, then the good will sell for a. $15 or slightly less. b. $25 or slightly more. c. $35 or slightly more. d. $45 or slightly less.

ANS: C

NAT: Analytic MSC: Applicative

DIF: 2 REF: 7-1 LOC: Supply and demand

TOP: Consumer surplus

29. Refer to Table 7-3. If there is only one unit of the good and if the buyers bid against each other for the right

to purchase it, then the consumer surplus will be a. $0 or slightly more. b. $10 or slightly less. c. $30 or slightly more. d. $45 or slightly less.

ANS: B

NAT: Analytic MSC: Applicative

DIF: 3 REF: 7-1 LOC: Supply and demand

TOP: Consumer surplus

30. Refer to Table 7-3. If the price is $30, then consumer surplus in the market is

a. $20, and Wilbur and Ming-la purchase the good. b. $20, and Carlos and Quilana purchase the good. c. $30, and Wilbur and Ming-la purchase the good. d. $30, and Carlos and Quilana purchase the good.

ANS: A

NAT: Analytic MSC: Applicative

DIF: 2 REF: 7-1 LOC: Supply and demand

TOP: Consumer surplus

31. Refer to Table 7-3. Who experiences the largest loss of consumer surplus when the price of the good

increases from $20 to $22? a. Quilana b. Wilbur c. Ming-la

d. All three buyers experience the same loss of consumer surplus.

ANS: D

NAT: Analytic MSC: Applicative

DIF: 3 REF: 7-1 LOC: Supply and demand

TOP: Consumer surplus

Chapter 7/Consumers, Producers, and the Efficiency of Markets ? 471

Table 7-4

The numbers in Table 7-1 reveal the maximum willingness to pay for a ticket to a Chicago Cubs vs. St. Louis Cardinal’s baseball game at Wrigley Field.

Buyer Jennifer Bryce Dan David Ken Lisa Willingness to Pay $10 $15 $20 $25 $50 $60 32. Refer to Table 7-4. If you have a ticket that you sell to the group in an auction, what will be the selling

price? a. $21 b. $26 c. $51 d. $61

ANS: C

NAT: Analytic MSC: Analytical

DIF: 2 REF: 7-1 LOC: Supply and demand

TOP: Consumer surplus

33. Refer to Table 7-4. If you have a ticket that you sell to the group in an auction, who will buy the ticket?

a. Dan b. David c. Ken d. Lisa

ANS: D

NAT: Analytic MSC: Analytical

DIF: 2 REF: 7-1 LOC: Supply and demand

TOP: Consumer surplus

34. Refer to Table 7-4. If tickets sell for $20 each, then what is the total consumer surplus in the market?

a. $5 b. $30 c. $40 d. $75

ANS: D

NAT: Analytic MSC: Analytical

DIF: 2 REF: 7-1 LOC: Supply and demand

TOP: Consumer surplus

35. Refer to Table 7-4. If tickets sell for $25 each, then what is the total consumer surplus in the market?

a. $25 b. $35 c. $60 d. $110

ANS: C

NAT: Analytic MSC: Analytical

DIF: 2 REF: 7-1 LOC: Supply and demand

TOP: Consumer surplus

36. Refer to Table 7-4. If you have two (essentially) identical tickets that you sell to the group in an auction,

what will be the selling price for each ticket? a. $21 b. $26 c. $51 d. $61

ANS: B

NAT: Analytic MSC: Analytical

DIF: 2 REF: 7-1 LOC: Supply and demand

TOP: Consumer surplus

472 ? Chapter 7/Consumers, Producers, and the Efficiency of Markets

Table 7-5

For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day.

Alex Barb Carlos First Orange $2.00 $1.50 $0.75 Second Orange $1.50 $1.00 $0.25 Third Orange $0.75 $0.80 $0 37. Refer to Table 7-5. If the market price of an orange is $1.20, the market quantity of oranges demanded per

day is a. 1. b. 2. c. 3. d. 4.

ANS: C

NAT: Analytic MSC: Analytical

DIF: 2 REF: 7-1 LOC: Supply and demand

TOP: Market demand

38. Refer to Table 7-5. If the market price of an orange is $0.70, the market quantity of oranges demanded per

day is a. 5. b. 6. c. 7. d. 9.

ANS: C

NAT: Analytic MSC: Analytical

DIF: 2 REF: 7-1 LOC: Supply and demand

TOP: Market demand

39. Refer to Table 7-5. The market quantity of oranges demanded per day is exactly 5 if the price of an orange, P,

satisfies

a. $1.00 < P < $1.50. b. $0.80 < P < $1.50. c. $0.80 < P < $1.00. d. $0.75 < P < $0.80.

ANS: D

NAT: Analytic MSC: Analytical

DIF: 3 REF: 7-1 LOC: Supply and demand

TOP: Market demand

40. Refer to Table 7-5. If the market price of an orange is $1.20, consumer surplus amounts to

a. $0.70. b. $1.10. c. $1.40. d. $5.00.

ANS: C

NAT: Analytic MSC: Analytical

DIF: 3 REF: 7-1 LOC: Supply and demand

TOP: Consumer surplus

41. Refer to Table 7-5. If the market price of an orange is $0.40,

a. 6 oranges are demanded per day, and total consumer surplus amounts to $4.45. b. 6 oranges are demanded per day, and total consumer surplus amounts to $5.10. c. 7 oranges are demanded per day, and total consumer surplus amounts to $5.35. d. 7 oranges are demanded per day, and total consumer surplus amounts to $5.50.

ANS: D DIF: 3 REF: 7-1 NAT: Analytic LOC: Supply and demand TOP: Market demand | Consumer surplus

MSC: Analytical