chapter 4 - Name: _ Date: _ Use the following to answer...

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Name: __________________________ Date: _____________ Use the following to answer question 1: Figure: Market for Hamburgers 1. (Figure: Market for Hamburgers) The figure shows the weekly market for hamburgers at the Tasty Burger Palace. If the price of a hamburger is $1.20 and 300 hamburgers are supplied, producer surplus will equal: A) $60. B) $65. C) $135. D) $360. 2. Total surplus is: A) the difference between price and the cost to the seller. B) the summation of consumer and producer surplus. C) equal to the area below the demand curve. D) determined by the costs for each producer and the benefits for each consumer. Page 1
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Use the following to answer questions 3-4: 3. (Table: Producer Surplus and Phantom Tickets) Given the information in the table, if the price for Phantom tickets is $55, total producer surplus for the five students is: A) $54. B) $79. C) $84. D) $64. 4. (Table: Producer Surplus and Phantom Tickets) Given the information in the table, if the price for Phantom tickets is $55, which student has the highest individual producer surplus? A) Tim B) Laura C) Rick D) Ralph 5. Which of the following statements is/are true about market failures? I. A seller produces too much of the good at too high of a price. II. Information is available to all decision makers. III. External costs are not considered in production decisions by producers. A) Statement I is true. B) Statements I and II are true. C) Statement III is true. D) Statements I, II, and III are true. Page 2
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6. Along a given supply curve, an increase in the price of a good will: A) increase producer surplus. B)
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This note was uploaded on 02/18/2012 for the course ECON 102 taught by Professor Kim during the Fall '08 term at University of Illinois, Urbana Champaign.

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chapter 4 - Name: _ Date: _ Use the following to answer...

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