Chapter 7 Post test

If the market price for a pontoon boat is $30,000, but Terri is willing to pay $32,000, what is the consumer surplus?

• $2,000

• $30,000

• $32,000

• $62,000

What a consumer actually pays for an additional unit of a good is known as ______.

• producer surplus

• wholesale price

• consumer surplus

• market price

April was very hungry and bought a slice of pizza for $2, even though she would have paid $3. Then she bought a second slice, for which she was willing to pay $2.50. She decided not to buy a third slice because she was only willing to pay $1. What concept does this example represent?

• Total welfare gains equal the sum of consumer and producer surpluses.

• Producers do not knowingly sell goods worth more to them than the asking price.

• Taxes create a deadweight loss to society.

• Marginal willingness to pay falls as more is consumed.

Each time a consumer purchases another unit of a product, what usually happens?

• The consumer’s willingness to pay the same price drops.

• The consumer’s willingness to pay the same price rises.

• The production quality of the product is better.

• The production quality of the product is worse.

It costs Joe twenty dollars to make a hat, and he sells it for thirty dollars. What is the name for the difference in these two prices?

• quantity discount

• market price

• consumer surplus

• producer surplus

The supply curve can be seen as being a marginal ______ curve.

• benefit

• cost

• demand

• rebate

If it costs Joy $15 to make a bracelet, and she receives $20 for it, what is her producer surplus on the bracelet?

• $35

• $20

• $15

• $5

If units of output of a product cost more to produce than the market price, producers will ______.

• see a higher profit margin

• see a greater producer surplus

• stop producing it

• produce more of it