Economics Quiz

Three consumers want to go to a concert: Jodi, Carlos and Sophia. Jodi is willing to spend up to $100 to go to the concert, Carlos is willing to spend $80 and Sophia is willing to spend $50. Suppose the ticket prices are set at $60/ticket. What is the combined consumer surplus of the group once ticket purchasing decisions are made?

• $130

• $100

• $70

• $60

• $50

Suppose the price of tickets to a show are $30.00 but Jane's willingness to pay is $40.00. Mark's willingness to pay is $50.00. Total consumer surplus is

• $50.00

• $30.00

• $120.00

• $90.00

• $70.00

At the perfectly competitive market equilibrium, which of the following is always TRUE?

• Consumer surplus is maximized.

• Producer surplus is maximized.

• Consumer surplus is minimized.

• Producer surplus is minimized.

• Total surplus is maximized.

When studying how some event affects a market, knowing t he product's elasticity can help provide information on

• whether costs of production will rise.

• whether costs of production will fall.

• the direction and magnitude of the effect.

• the effect on family budgets.

• Pareto efficiency.

Which of the following events could cause an increase in the supply of umbrellas?

• The number of sellers of umbrellas increases.

• There is an increase in the price of raincoats, a substitute for ceiling fans.

• There is an increase in the price of rods used to make the umbrellas.

• a decrease in the price of apples

• an increase in the wages of umbrella manufacturers

Free trade causes total surplus to _____.

• increase

• decrease

• remain the same

• increase only if the world price is above the domestic price

• increase only if the world price is below the domestic price.

An inferior good is a good whose demand increases when

• the price increases.

• the price of a substitute increases.

• the price of a complement increases.

• future expectations increase.

• income decreases.

The negative relationship between a good's price and the quantity demanded is the...

• Adam Smith law.

• law of perfect equilibrium.

• law of supply.

• law of economics.

• law of demand.

Which type of costs include the opportunity costs of all resources required for production?

• explicit costs

• variable costs

• accounting costs

• marginal costs

• economic costs

Suppose the price of peaches rises. In response, the demand for cream decreases. These goods are

• normal goods.

• inferior goods.

• substitutes.

• complements.

• collective goods.