review exercise_welfare_sol

review exercise_welfare_sol - Chapter 7 Consumers,...

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Chapter 7 Consumers, Producers, and the Efficiency of Markets 8.A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it a. maximizes total revenue for firms and maximizes the quantity supplied of the product. b. maximizes the combined welfare of buyers and sellers. c. minimizes costs and maximizes profits of sellers. d. minimizes the level of welfare payments to those who no longer live below the poverty line. ANS: B PTS: 1 DIF: 2 REF: 7-0 TOP: Economic welfare | Equilibrium price MSC: Interpretive 11. Willingness to pay a. measures the value that a buyer places on a good. b. is the amount a seller actually receives for a good minus the minimum amount the seller is willing to accept. c. is the maximum amount a buyer is willing to pay minus the minimum amount a seller is willing to accept. d. is the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. ANS: A PTS: 1 DIF: 2 REF: 7-1 TOP: Price | Value MSC: Interpretive 12. Consumer surplus is a. the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. b. the amount a buyer is willing to pay for a good minus the cost of producing the good. c. the amount by which the quantity supplied of a good exceeds the quantity demanded of the good. d. a buyer's willingness to pay for a good plus the price of the good. ANS: A
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review exercise_welfare_sol - Chapter 7 Consumers,...

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