Chapter 7/Consumers, Producers, and the Efficiency of Markets ? 489
13. Ivana produces cookies. Her production cost is $6 per dozen. She sells the cookies for $8 per dozen. Her
producer surplus per dozen cookies is a. $2. b. $6. c. $8. d. $14.
ANS: A
NAT: Analytic MSC: Interpretive
DIF: 1 REF: 7-2 LOC: Supply and demand
TOP: Producer surplus
14. Donald produces nails at a cost of $200 per ton. If he sells the nails for $350 per ton, his producer surplus per
ton is a. $150. b. $200. c. $350. d. $550.
ANS: A
NAT: Analytic MSC: Applicative
DIF: 1 REF: 7-2 LOC: Supply and demand
TOP: Producer surplus
15. If Roberta sells a shirt for $30, and her producer surplus from the sale is $23, her cost must have been
a. $53. b. $30. c. $7.
d. We would have to know the consumer surplus in order to make this determination.
ANS: C
NAT: Analytic MSC: Applicative
DIF: 2 REF: 7-2 LOC: Supply and demand
TOP: Producer surplus
16. Ronnie operates a lawn-care service. On each day, the cost of mowing the first lawn is $10, the cost of
mowing the second lawn is $12, and the cost of mowing the third lawn is $15. His producer surplus on the first three lawns of the day is $53. If Ronnie charges all customers the same price for lawn mowing, that price is a. $25. b. $30. c. $36. d. $45.
ANS: B
NAT: Analytic MSC: Applicative
DIF: 3 REF: 7-2 LOC: Supply and demand
TOP: Producer surplus
17. At Nick's Bakery, the cost to make homemade chocolate cake is $3 per cake. As a result of selling three cakes,
Nick experiences a producer surplus in the amount of $19.50. Nick must be selling his cakes for a. $6.50 each. b. $7.50 each. c. $9.50 each. d. $10.50 each.
ANS: C
NAT: Analytic MSC: Applicative
DIF: 3 REF: 7-2 LOC: Supply and demand
TOP: Producer surplus
18. Kristi and Rebecca sell lemonade on the corner. It costs them 7 cents to make each cup. On a certain day, they
sell 40 cups, and their producer surplus for that day amounts to $15.20. Kristi and Rebecca sold each cup for a. 31 cents. b. 38 cents. c. 45 cents. d. 55 cents.
ANS: C
NAT: Analytic MSC: Applicative
DIF: 3 REF: 7-2 LOC: Supply and demand
TOP: Producer surplus
490 ? Chapter 7/Consumers, Producers, and the Efficiency of Markets Table 7-6
The following table represents the costs of five possible sellers.
Seller Abby Bobby Carlos Dianne Evalina Cost $1,500 $1,200 $1,000 $750 $500 19. Refer to Table 7-6. If the market price is $1,000, the producer surplus in the market is
a. $700. b. $750. c. $2,250. d. $3,700.
ANS: B
NAT: Analytic MSC: Analytical
DIF: 2 REF: 7-2 LOC: Supply and demand
TOP: Producer surplus
20. Refer to Table 7-6. If the market price is $900, the producer surplus in the market is
a. $350. b. $550. c. $750. d. $1,000.
ANS: B
NAT: Analytic MSC: Analytical
DIF: 2 REF: 7-2 LOC: Supply and demand
TOP: Producer surplus
21. Refer to Table 7-6. If the market price is $1,100, the combined total cost of all participating sellers is
a. $3,700. b. $2,700. c. $2,250. d. $1,250.
ANS: C
NAT: Analytic MSC: Analytical
DIF: 2 REF: 7-2 LOC: Supply and demand
TOP: Opportunity cost
22. Refer to Table 7-6. If the market price is $900, the combined total cost of all participating sellers is
a. $3,700. b. $2,700. c. $2,250. d. $1,250.
ANS: D
NAT: Analytic MSC: Analytical
DIF: 2 REF: 7-2 LOC: Supply and demand
TOP: Opportunity cost
23. Refer to Table 7-6. If the price is $1,000,
a. Bobby is an eager supplier. b. Dianne is an eager supplier. c. Abby’s producer surplus is $500. d. All of the above are correct.
ANS: B
NAT: Analytic MSC: Applicative
DIF: 2 REF: 7-2 LOC: Supply and demand
TOP: Producer surplus | Supply
Chapter 7/Consumers, Producers, and the Efficiency of Markets ? 491
24. Refer to Table 7-6. If the price is $775, who would be willing to supply the product?
a. Abby and Bobby
b. Abby, Bobby, and Carlos c. Carlos, Dianne, and Evalina d. Dianne and Evalina
ANS: D
NAT: Analytic MSC: Applicative
DIF: 2 REF: 7-2 LOC: Supply and demand
TOP: Producer surplus | Supply
25. Refer to Table 7-6. Suppose each of the five sellers can supply at most one unit of the good. The market
quantity supplied is exactly 3 if the price is a. $670. b. $770. c. $970. d. $1,170.
ANS: D
NAT: Analytic MSC: Analytical
DIF: 2 REF: 7-2 LOC: Supply and demand
TOP: Producer surplus | Supply
26. Refer to Table 7-6. Suppose each of the five sellers can supply at most one unit of the good. The market
quantity supplied is exactly 4 if the price is a. $770. b. $970. c. $1,170. d. $1,370.
ANS: D
NAT: Analytic MSC: Analytical
DIF: 2 REF: 7-2 LOC: Supply and demand
TOP: Producer surplus | Supply
27. Refer to Table 7-6. Who is a marginal seller when the price is $1,200?
a. Bobby
b. Bobby and Abby
c. Carlos, Dianne, and Evalina
d. Carlos, Dianne, Evalina, and Bobby
ANS: A
NAT: Analytic MSC: Applicative
DIF: 2 REF: 7-2 LOC: Supply and demand
TOP: Marginal seller
Table 7-7
The only four producers in a market have the following cost:
Seller Charlie Quinn Wrex Maxine Cost $50 $100 $150 $200 28. Refer to Table 7-7. If the sellers bid against each other for the right to sell the good to a consumer, then the
good will sell for
a. $50 or slightly more. b. $100 or slightly less. c. $150 or slightly less. d. $200 or slightly more.
ANS: B
NAT: Analytic MSC: Analytical
DIF: 2 REF: 7-2 LOC: Supply and demand
TOP: Price | Cost
492 ? Chapter 7/Consumers, Producers, and the Efficiency of Markets
29. Refer to Table 7-7. If the sellers bid against each other for the right to sell the good to a consumer, then the
producer surplus will be a. $0 or slightly more. b. $50 or slightly less. c. $150 or slightly less. d. $200 or slightly more.
ANS: B DIF: 3 REF: 7-2 NAT: Analytic LOC: Supply and demand TOP: Price | Cost | Producer surplus MSC: Analytical
30. Refer to Table 7-7. If Charlie, Quinn, and Wrex sell the good, and the resulting producer surplus is $300,
then the price must have been a. $200. b. $300. c. $450. d. $600.
ANS: A DIF: 3 REF: 7-2 NAT: Analytic LOC: Supply and demand TOP: Price | Cost | Producer surplus MSC: Analytical
31. Refer to Table 7-7. If Charlie, Quinn, Wrex, and Maxine sell the good, and the resulting producer surplus is
$700, then the price must have been a. $200. b. $300. c. $500. d. $700.
ANS: B DIF: 3 REF: 7-2 NAT: Analytic LOC: Supply and demand TOP: Price | Cost | Producer surplus MSC: Analytical
Table 7-8
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
Seller Marcia Jan Cindy Greg Peter Bobby Cost $200 $250 $350 $400 $700 $800 32. Refer to Table 7-8. You wish to purchase 10 piano lessons, so you take bids from each of the sellers. You
will not accept a bid below a seller’s cost because you are concerned that the seller will not provide all 10 lessons. What bid will you accept? a. $351 b. $251 c. $249 d. $199
ANS: C
NAT: Analytic MSC: Analytical
DIF: 2 REF: 7-2 LOC: Supply and demand
TOP: Producer surplus