Surplus!

After soccer practice, Phil is willing to pay $1 for a bottle of spring water. He stops at Sheetz which is selling bottles of spring water for $1.50, so declines to purchase it. His consumer surplus is:

• $0
• $0.50
• $1
• $1.50

What is the equilibrium price of a book in this market?

• $75
• $80
• $85
• $90

You are the manager of Fun World, a small amusement park that only charges per ride. The diagram shows the demand curve for a typical customer. At $5 per ride, how much consumer surplus does each customer get? (Hint = you need to calculate the area of a triangle)

• $5

• $15

• $25

• $50

Now suppose you consider lowering the price per ride to $0. How much consumer surplus would each individual customer get? (Hint = you need to calculate the area of a triangle)

• $50

• $75

• $100

• $200

Now that you have lowered the price per ride to $0, what is the maximum admission fee Fun World could charge to the typical customer? (Hint = consider the amount of consumer surplus!)

• $50

• $75

• $100

• $200

In the diagram, consumer surplus is represented by:

• P2, B, P3
• A, B, C
• P2, B, P0
• P1, C, A, P3

Consumer surplus in a market for a good exists because:

• Some producers charge different prices for the good in different markets
• Producers don't have the ability to set their own price
• When the price of goods decrease, most consumers buy more
• Some consumers are willing to pay more than the equilibrium price

Refer to the graph shown. When the market price rises from P1 to P2, consumer surplus:

• Increases by an amount equal to A
• Decreases by an amount equal to B + C
• Increases by an amount equal to B + C
• Decreases by an amount equal to C

Samantha loves her job so much, she would do it for free. Last year Samantha made $45,000 at her job. This year, she makes $50,000. Samantha's producer surplus for this year is:

• $0
• $5,000
• $50,000
• $95,000

Gordon lists his old Lionel electric trains on eBay and sets a minimum acceptable price at $75. He received three bids after five days on eBay: $25, $50, and $75. He accepts the latter. His producer surplus is:

• $0

• $25

• $50

• $75