Quiz%205 - QUIZ 5 ECON 210 NAME:_ 1. According to the text,...

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QUIZ 5 – ECON 210 NAME:_________________________________ 1. According to the text, what is the difference between the total value a consumer places on a good and the price actually paid? a. Producer Surplus b. Total Surplus c. Economic Profit d. Consumer Surplus 2. Suppose the marginal value for your first cup of tea is $3, $2 for the second cup and $1 for the third cup. As you walk along, you see a sign at STARBUCKS indicating that they are selling tea for $1.50/cup. What would be your consumer surplus from buying two cups of tea at STARBUCKS? a. $2 b. $4 c. $5 d. $0.5 3. When there is a surplus in the market for a good, according to the text, what happens in the market? a. Rising prices will cause the demand to shift to the left resulting in higher prices and a decreased quantity demanded b. A falling price will increase quantity demanded, establishing a new equilibrium at a lower price. c. A falling price reduces the marginal value of the good in question, hence shifting the demand curve to the left d. A rising price means that the marginal value of the good has increased at every
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This note was uploaded on 02/26/2012 for the course ECON 210 taught by Professor Staff during the Fall '08 term at Purdue University-West Lafayette.

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Quiz%205 - QUIZ 5 ECON 210 NAME:_ 1. According to the text,...

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