Exam+01+Prep+Chapter+05

# Exam+01+Prep+Chapter+05 - Exam 1 Prep Questions for Chapter...

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Exam 1 Prep Questions for Chapter 5 1) In the above figure, the marginal cost of the second ton of wheat is A) \$25. B) \$75. C) \$50. D) none of the above Topic: Producer Surplus 2) If a person will rent an apartment only to married couples over 30 years old, that person is allocating resources using a ________ allocation method. Topic: Study Guide Question, Resource Allocation Method 1

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The figure shows the competitive market for milk. 3) In the figure above, when the market is in equilibrium, what is the total surplus? Topic: Efficiency of Competitive Markets 4) The market supply curve is also the Topic: Supply Curve 5) When the Smiths were shopping for their present home, the asking price from the previous owner was \$250,000.00. The Smiths had decided they would pay no more than \$245,000.00 for the house. After negotiations, the Smiths actually purchased the house for \$239,000.00. Therefore, the previous owner earned a producer surplus of A) \$11,000.00. B) \$5,000.00. C) \$250,000.00. D) an amount unknown given the information in the question. Topic: Producer Surplus 2
6) The figure above shows the market for umbrellas in Sunville. When the market for umbrellas in Sunville is in equilibrium, what is the total deadweight loss? Topic: Deadweight Loss 7) At the current quantity of table saws, the marginal social cost is more than the marginal social benefit. Then Topic: Efficiency and Inefficiency 3

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8) The figure above shows the market for coffee. The ________ price that producers must be offered to get them to produce 10 million pounds of coffee per month is ________. Topic: Marginal Cost Price (dollars per umbrella) Quantity demanded Quantity supplied 0 90 0 10 80 0 20 40 40 30 20 80 40 0 120 9) In the table above, if there are 80 umbrellas produced, the deadweight loss from the 80th umbrella is A) \$10. B) \$40. C) \$30. D) \$20. Topic: Deadweight Loss 4
10) Fitness is a magazine for women about health and exercise. Fitness offers year subscriptions for \$12 on their website. Jess, Ania, Mandy, and Chloe exercise together and each enjoy reading Fitness. Jess is willing to pay \$10, Ania is willing to pay \$16, Mandy is willing to pay \$24, and Chloe is willing to pay \$12 for a subscription to the magazine. What is the value of Chloe's consumer surplus? Topic: Consumer Surplus

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• Spring '09
• PERRY
• Supply And Demand, producer, Marginal social benefit, marginal social cost

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