107. In a market transaction, how is it possible for both the buyer and seller to be better off?

The transaction creates value from the difference between willingness to pay and cost

Only the buyer benefits from the transaction

Only the seller benefits from the transaction

The transaction always results in a zero-sum game

109. At the equilibrium price, which statement is true about buyers and sellers?

Buyers have higher value of the good than non-buyers

Buyers have lower value of the good than non-buyers

Sellers have higher costs of the good than non-sellers

Sellers and buyers always have equal values and costs

112. If the price is below the equilibrium price, how does the market adjust?

Buyers compete, driving the price up to equilibrium

Demand increases until equilibrium is reached

Supply decreases until equilibrium is reached

The government intervenes to set the price

113. What are the unexploited gains from trade if the quantity is below the equilibrium quantity?

Both buyers with high willingness to pay cannot buy and sellers with low costs cannot sell

Buyers with high willingness to pay cannot buy

Sellers with low costs cannot sell

114. Why doesn't providing everyone who wants a good with that good maximize total surplus?

Some trades would be wasteful as cost exceeds value

It would create too much consumer surplus

It would create too much producer surplus

It would lead to market shortages

115. Which of the following is NOT a reason why equilibrium maximizes total surplus?

The government ensures fair distribution

Buyers with the highest value buy the good

Sellers with the lowest cost produce the good

117. In a market transaction, how is it possible for both the buyer and seller to be better off?

The transaction creates value from the difference between willingness to pay and cost

Only the buyer benefits from the transaction

Only the seller benefits from the transaction

The transaction always results in a zero-sum game

118. At the equilibrium price, which statement is true about buyers and sellers?

Buyers have higher value of the good than non-buyers

Buyers have lower value of the good than non-buyers

Sellers have higher costs of the good than non-sellers

Sellers and buyers always have equal values and costs

121. If the price is below the equilibrium price, how does the market adjust?

Buyers compete, driving the price up to equilibrium

Demand increases until equilibrium is reached

Supply decreases until equilibrium is reached

The government intervenes to set the price

122. Which of the following is NOT a reason why equilibrium maximizes total surplus?

The government ensures fair distribution

Buyers with the highest value buy the good

Sellers with the lowest cost produce the good

123. Which of the following best describes the concept of scarcity in economics?

The mismatch between unlimited wants and limited resources

The limitation of human desires

The equal distribution of goods

126. If the government loosens restrictions on foreign doctors practicing medicine in the United States, which description below best predicts what will happen to the healthcare market?

The supply curve shifts to the right which leads to a lower equilibrium price and higher equilibrium quantity.

The supply curve shifts to the right which leads to a higher equilibrium price and higher equilibrium quantity.

The supply curve shifts to the left which leads to a lower equilibrium price and lower equilibrium quantity.

The supply curve shifts to the left which leads to a higher equilibrium price and lower equilibrium quantity.

130. Which of the following describes consumer surplus at the market level? (mark all that apply)

It is the sum of each individual’s consumer surplus

Graphically it is represented by the area from the demand curve to the price

It is the sum of each individual’s consumer surplus minus cost

Graphically it is represented by the area from the demand curve to the supply curve

132. Which of the following price quantity combinations maximizes total surplus?

the equilibrium price and equilibrium quantity

the lowest price (free) and the equilibrium quantity

the price that maximizes profits and the equilibrium quantity

the equilibrium price and the quantity that government decides is best

133. Total Surplus is (mark all that apply):

the sum of producer and consumer surplus.

always positive when transactions are voluntary.

graphically is represented by the area from the demand curve to the supply curve.

greatest when prices are lowest.

134. According to the law of demand, a decrease in price

Does not shift the demand curve, but results in a movement ALONG the demand curve to the right.

Shifts the demand curve to the left.

Shifts the demand curve to the right.

Does not shift the demand curve, but results in a movement ALONG the demand curve to the left.

135. All of the following will shift the demand curve for oranges to the RIGHT except:

A new technology for orange picking makes harvesting oranges cheaper.

An increase in the price of apples, a substitute for oranges.

A new study shows that drinking fresh orange juice reduces the likelihood of kidney stones.

Consumers expect higher prices for oranges next month due to hurricanes destroying crops.

All of the above shift the demand curve to the RIGHT.

136. An increase in the price of yellow paint coating, an input for No. 2 pencils, will:

Cause the supply curve for No. 2 pencils to shift to the left.

Cause the demand curve for No. 2 pencils to shift to the right.

Cause the demand curve for ballpoint pens, a substitute for pencils, to shift to the left.

137. An increase in the price of roses will:

Definitely result in a decrease in the quantity demanded of roses.

Definitely result in a shift to the right of the supply curve.

Definitely result in an increase in the quantity demanded of roses.

Definitely result in a shift to the left of the demand curve.

138. An increase in the price of oat milk, a substitute for almond milk, will:

Shift the demand curve for almond milk to the right.

Decrease the quantity demanded of almond milk.

Increase the quantity demanded of oat milk.

Shift the demand curve for oat milk to the left.

139. Take the market for fanny packs. If the price of a complement decreases,

The demand curve for fanny packs will shift to the right.

The demand curve for fanny packs will shift to the left.

There will be no shift of the demand curve for fanny packs, but instead there will be movement along the demand curve to the right.

There will be no shift in the demand curve for fanny packs, but instead a movement along the demand curve to the left.

The supply curve will shift right.

140. Which of the following will cause a movement ALONG the supply curve for lumber?

Consumer demand for decks and patios increases 10x fold.

A new area of forest is purchased for logging (cutting trees for lumber)

Labor costs increase, prompting loggers to have to pay more for lumberjacks.

141. According to the law of supply, sellers will be more likely to increase their quantity supplied when

When the selling price increases.

They can sell their goods cheaply.

When there are lots of suppliers in the market.

When they are the only supplier of a good.

142. When Joanna permanently closes the movie theater she ran in her hometown, this causes:

A shift to the left of the supply curve for movie tickets.

A shift to the right of the supply curve for movie tickets.

A movement along the supply curve for movie tickets, that is a decrease in the quantity supplied.

A shift to the left in the demand curve for movie tickets.

143. What happens in the market for cheese when the price of milk decreases?

The price of cheese decreases and the quantity of cheese at equilibrium increases, since milk is an ingredient in cheese.

The price of cheese decreases and equilibrium quantity stays the same.

The price of cheese increases due to the increased demand (shift to the right) for milk.

The price of cheese is unrelated to the price of milk.

146. What is consumer surplus?

The difference between willingness to pay and the price

The difference between the price paid and the cost to produce

The total amount spent by consumers

The total revenue earned by producers

147. Why is consumer surplus never negative?

Because transactions are voluntary

Because consumers always pay more than they value the product

Because producers set prices below consumer value

Because consumer surplus is calculated after discounts

Econ Final Exam Review 3

Authored by Daniel Hamilton

Social Studies

9th Grade

Used 13+ times

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50 questions

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

100. If a consumer values a concert ticket at $100 and the actual price is $75, what is the consumer surplus?

$25

$75

$100

$175

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

101. What is producer surplus?

The total revenue a producer earns

The difference between the selling price and the cost to make a product

The total profit a producer makes in a year

The difference between consumer surplus and total revenue

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

102. Which of the following statements about voluntary transactions is true?

They always result in equal consumer and producer surplus

They always generate both consumer and producer surplus

They only benefit the seller

They only occur when the price exactly matches the consumer's willingness to pay

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

103. In what situation would a producer choose not to sell their product?

When the market price is higher than their costs

When consumer surplus is positive

When the market price is lower than their minimum acceptable price

When demand is high

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

104. How does an increase in market price generally affect consumer surplus?

It always increases consumer surplus

It tends to decrease consumer surplus

It has no effect on consumer surplus

It eliminates consumer surplus entirely

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

105. What does the area between the demand curve and the market price represent?

Producer surplus

Total revenue

Consumer surplus

Economic profit

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

106. What is the correct formula for calculating total surplus for an individual item transaction?

Total Surplus = Willingness To Pay - Price

Total Surplus = Price - Cost

Total Surplus = (Willingness To Pay - Price) + (Price - Cost)

Total Surplus = Willingness To Pay + Cost

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Econ Final Exam Review 3

100. If a consumer values a concert ticket at $100 and the actual price is $75, what is the consumer surplus?

101. What is producer surplus?

102. Which of the following statements about voluntary transactions is true?

103. In what situation would a producer choose not to sell their product?

104. How does an increase in market price generally affect consumer surplus?

105. What does the area between the demand curve and the market price represent?

106. What is the correct formula for calculating total surplus for an individual item transaction?

107. In a market transaction, how is it possible for both the buyer and seller to be better off?

108. If George buys a custom shirt from Tara for $30, he values it at $50, and it cost her $20 to make, what is the total surplus?

109. At the equilibrium price, which statement is true about buyers and sellers?

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