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?

• $25
• $75
• $100
• $175

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

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

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

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

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

• Producer surplus
• Total revenue
• Consumer surplus
• Economic profit

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

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

• Only the buyer benefits from the transaction
• Only the seller benefits from the transaction
• The transaction creates value from the difference between willingness to pay and cost
• The transaction always results in a zero-sum game

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?

• $20
• $30
• $50

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

• Buyers have lower value of the good than non-buyers
• Sellers have higher costs of the good than non-sellers
• Buyers have higher value of the good than non-buyers
• Sellers and buyers always have equal values and costs