C13 Exam 3 with Answers (Ashworth College)

C13 Exam 3 with Answers (Ashworth
College)
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C13 Exam 3 with Answers (Ashworth College)
Question 1 of 205.0/ 5.0 Points
Assume that linen pants are a normal good and consumer income rises. If the supply of linen pants remains
constant, producer surplus __________ .
A. will decrease
B. will increase
C. will remain constant
D. may increase or decrease depending on the amount of the price
increase
Question 2 of 205.0/ 5.0 Points
If the market price of salmon is $8.99 per pound but the government will not allow salmon farmers to charge
more than $4.99 per pound, which of the following will happen?
A. The supply curve for salmon will shift to the left.
B. There will be an excess demand for salmon.
C. There will be an excess supply of salmon.
D. The market will be in equilibrium at a price of

$4.99.
Question 3 of 205.0/ 5.0 Points
Mary has an old house built in 1950 that she would be willing to sell for $100,000. If someone offers to buy her
house for $110,000, Mary's producer surplus would be equal to __________ .
A. $5,000
B. $10,000
C. $55,000
D.
$100,000
Question 4 of 200.0/ 5.0 Points
If the government sets a maximum price for gasoline above the equilibrium price, __________ .
A. quantity demanded of gasoline will be equal to quantity supplied of
gasoline
B. there will be excess demand for gasoline
C. there will be excess supply of gasoline
D. demand for gasoline will be less than supply of gasoline
Question 5 of 205.0/ 5.0 Points
Assume that Crystal's demand for handbags remains constant, but the price of handbags increases. Crystal's
consumer surplus __________ .
A. decreases
B. increases
C. remains constant
D. may increase or decrease depending on the amount of the price
decrease

Question 6 of 205.0/ 5.0 Points
A ban on imported avocados would result in __________ .
A. an increase in total surplus because domestic production will increase
B. no change in total surplus because the reduction in consumer surplus will offset the increase
in producer surplus
C. a reduction in total surplus because a deadweight loss is created
D. It is impossible to say what will happen to total surplus.
Question 7 of 205.0/ 5.0 Points
Assume that there is rent control in Chicago. Which of the following is true?
A. All consumers in the rental market will benefit because the rent will be lower.
B. The total surplus will fall because there will be a shortage of apartments.
C. The total surplus will rise because consumer surplus will increase.
D. Consumer surplus will increase and as a result all consumers in the rental market will
benefit.
Question 8 of 205.0/ 5.0 Points
Jody's bakery makes cakes and would be willing to sell each cake for $12.50. If Jody's bakery sells 10 cakes
for $13 each, the total producer surplus for Jody's bakery would be equal to __________ .
A. $5.00
B. $12.50
C. $125.00
D.
$130.00
Question 9 of 205.0/ 5.0 Points

Consumer surplus can be defined as the __________ .
A. value a consumer receives from a good minus the price paid for that
good
B. maximum amount the consumer would pay for a good
C. actual amount paid for a good minus the benefit of using that good
D. marginal utility of a good divided by its price
Question 10 of
20
5.0/ 5.0 Points
Laura makes hand-made jewelry and she would be willing to sell pairs of earrings for $50. If Laura sells each
pair of earrings for $65, her producer surplus per pair of earrings sold would be equal to __________ .
A.
$115
B. $65
C. $15
D. $50
Question 11 of
20
5.0/ 5.0 Points
If the equilibrium price of gasoline is $2.75 per gallon and the government will not allow oil companies to
charge more than $2.00 per gallon, which of the following will happen?
A. Demand must eventually decrease so that the market will come into equilibrium at a price of
$2.00.
B. Supply must eventually increase so that the market will come into equilibrium at a price of
$2.00.
C. Total surplus in the market will be lower than it would be if the price was $2.75 per gallon.
D. The market will be in equilibrium at a price of $2.00.

Question 12 of
20
5.0/ 5.0 Points
Assume that the supply of smartphones remains constant, but the price of smartphones increases. Producer
surplus __________ .
A. will decrease
B. will increase
C. will remain constant
D. may increase or decrease depending on the amount of the price
increase
Question 13 of
20
5.0/ 5.0 Points
The difference between the maximum amount a person is willing to pay for a good and its current market price
is known as __________ .
A. the paradox of
value
B. profits
C. revealed preferences
D. consumer surplus
Question 14 of
20
0.0/ 5.0 Points
At the market equilibrium, resources are allocated efficiently because __________ .
A. the marginal cost of producing another unit is equal to zero
B. the price buyers pay accurately reflects the marginal cost of the resources used to produce the
good
C. the price buyers pay is greater than sellers' willingness to sell

D. all of the above
Question 15 of
20
0.0/ 5.0 Points
If the government imposes a maximum price for milk that is above the equilibrium price __________ .
A. this maximum price for milk will have no economic impact
B. quantity demanded of milk will be less than quantity
supplied
C. demand for milk will be greater than supply
D. the available milk supply will have to be rationed
Question 16 of
20
5.0/ 5.0 Points
Suppose that you are willing to pay $25 for a new shirt and the market price is $35. In this case __________ .
A. you will not buy the good
B. you will buy the good and receive a consumer surplus of $5
C. you will buy the good and receive a consumer surplus of –$10
D. you will buy the good and receive a consumer surplus of –
$35
Question 17 of
20
5.0/ 5.0 Points
If the government sets a minimum price above the equilibrium price for soybeans, which of the following
statements will be correct?
A. There will be an efficient level of output
produced.
B. There will be excess supply.

C. There will be excess demand.
D. all of the above
Question 18 of
20
5.0/ 5.0 Points
The conclusion that the level of output is efficient at the market equilibrium rests on all of the following
assumptions EXCEPT that __________ .
A. buyers and sellers are well-informed
B. there are no external costs or benefits
C. the government regulates price and
output
D. the market is perfectly competitive
Question 19 of
20
5.0/ 5.0 Points
Recall the application on rent control and mismatches. Under rent control, the government sets a maximum
price for housing, decreasing the quantity supplied and the total value of the market. Rent control and other
maximum prices cause __________ and possibly __________ .
A. inefficiency;
mismatches
B. efficiency: mismatches
C. mismatches: equilibrium
D. none of the above
Question 20 of
20
5.0/ 5.0 Points
Suppose you receive a consumer surplus of $50. The $50 represents __________ .
A. a monetary payment from the store
B. a monetary payment from the government

C. a reduction in the original price of the good
D. the fact that you paid $50 less than you were willing to pay for the
good