Untitled Presentation

Multiple Choice

Which of the following best describes the main concern of welfare economics?

• How to maximize the profits of producers

• How to ensure the market allocation is desirable for society

• How to set prices in a monopoly

• How to increase government intervention in markets

Multiple Choice

What is the main focus of welfare economics?

• The study of how the allocation of resources affects economic well-being

• The study of government policies

• The study of international trade

• The study of business profits

Multiple Choice

How does market equilibrium affect the total welfare of buyers and sellers?

• It maximizes the total welfare of buyers and sellers

• It minimizes the total welfare of buyers and sellers

• It has no effect on welfare

• It only benefits sellers

Open Ended

Explain the difference between consumer surplus and producer surplus.

Multiple Choice

Which of the following best describes consumer surplus?

• The buyer’s willingness to pay for a good minus the amount the buyer actually pays for it

• The seller’s cost of producing a good

• The total revenue received by sellers

• The maximum price a seller is willing to accept

Multiple Choice

Which of the following best describes what the market demand curve shows?

• The relationship between price and the quantity supplied by sellers

• The various quantities that buyers would be willing and able to purchase at different prices

• The total revenue earned by sellers at each price

• The cost of production for each unit sold

Multiple Choice

Based on the demand schedule, how many buyers are willing to purchase the album if the price is $70 to $80?

• 1

• 2

• 3

• 4

Open Ended

Describe how consumer surplus changes as the price of the album decreases from $80 to $70, using the graphs provided.

Multiple Choice

At a price of $70, what is the total consumer surplus, and how is it distributed among the buyers?

• $30, all to John

• $40, $30 to John and $10 to Paul

• $20, all to John

• $40, equally among all buyers

Multiple Choice

Which area in the first diagram represents the consumer surplus when the price is P1?

• Triangle ABC

• Rectangle OBQC

• Triangle OBC

• Rectangle ABQ1C

Open Ended

Explain how consumer surplus is measured and what it represents.

Multiple Choice

Which seller has the lowest cost according to the table?

• Mary

• Frida

• Georgia

• Grandma

Multiple Choice

Which seller will only supply house painting services if the price is $900 or more?

• Mary

• Frida

• Georgia

• Grandma

Multiple Choice

Based on the supply schedule and the supply curve, how does the number of sellers change as the price increases from less than $500 to $900 or more?

• The number of sellers decreases

• The number of sellers stays the same

• The number of sellers increases

• The number of sellers first increases then decreases

Open Ended

Explain how the supply curve can be used to measure producer surplus in a market.

Open Ended

At a price of $800, what is the total producer surplus and how is it distributed among the sellers?

Multiple Choice

Which of the following statements best describes the relationship between price and producer surplus as shown in the supply curve diagrams?

• Producer surplus decreases as price increases

• Producer surplus increases as price increases

• Producer surplus remains constant as price changes

• Producer surplus is unrelated to price

Open Ended

After learning about consumers, producers, and market efficiency, what is one question you still have or something you would like to know more about?

Open Ended

How does market equilibrium contribute to the allocation of scarce resources?