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WorksheetsEcon Final Exam Review 3
Total questions: 50
Worksheet time: 25mins
Name
Class
Date
1.
100. If a consumer values a concert ticket at $100 and the actual price is $75, what is the consumer surplus?
a)
$25
b)
$75
c)
$100
d)
$175
2.
101. What is producer surplus?
a)
The total revenue a producer earns
b)
The difference between the selling price and the cost to make a product
c)
The total profit a producer makes in a year
d)
The difference between consumer surplus and total revenue
3.
102. Which of the following statements about voluntary transactions is true?
a)
They always result in equal consumer and producer surplus
b)
They always generate both consumer and producer surplus
c)
They only benefit the seller
d)
They only occur when the price exactly matches the consumer's willingness to pay
4.
103. In what situation would a producer choose not to sell their product?
a)
When the market price is higher than their costs
b)
When consumer surplus is positive
c)
When the market price is lower than their minimum acceptable price
d)
When demand is high
5.
104. How does an increase in market price generally affect consumer surplus?
a)
It always increases consumer surplus
b)
It tends to decrease consumer surplus
c)
It has no effect on consumer surplus
d)
It eliminates consumer surplus entirely
6.
105. What does the area between the demand curve and the market price represent?
a)
Producer surplus
b)
Total revenue
c)
Consumer surplus
d)
Economic profit
7.
106. What is the correct formula for calculating total surplus for an individual item transaction?
a)
Total Surplus = Willingness To Pay - Price
b)
Total Surplus = Price - Cost
c)
Total Surplus = (Willingness To Pay - Price) + (Price - Cost)
d)
Total Surplus = Willingness To Pay + Cost
8.
107. In a market transaction, how is it possible for both the buyer and seller to be better off?
a)
Only the buyer benefits from the transaction
b)
Only the seller benefits from the transaction
c)
The transaction creates value from the difference between willingness to pay and cost
d)
The transaction always results in a zero-sum game
9.
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?
a)
$20
b)
$30
c)
$50
10.
109. At the equilibrium price, which statement is true about buyers and sellers?
a)
Buyers have lower value of the good than non-buyers
b)
Sellers have higher costs of the good than non-sellers
c)
Buyers have higher value of the good than non-buyers
d)
Sellers and buyers always have equal values and costs
11.
110. How many trades at the equilibrium price create negative total surplus?
a)
All trades
b)
Half of the trades
c)
One trade
d)
Zero trades
12.
111. What happens to total surplus if the price is set lower than the equilibrium price?
a)
Total surplus increases
b)
Total surplus remains the same
c)
Total surplus decreases
d)
Total surplus becomes negative
13.
112. If the price is below the equilibrium price, how does the market adjust?
a)
Demand increases until equilibrium is reached
b)
Supply decreases until equilibrium is reached
c)
The government intervenes to set the price
d)
Buyers compete, driving the price up to equilibrium
14.
113. What are the unexploited gains from trade if the quantity is below the equilibrium quantity?
a)
There are no unexploited gains
b)
Buyers with high willingness to pay cannot buy
c)
Sellers with low costs cannot sell
d)
Both buyers with high willingness to pay cannot buy and sellers with low costs cannot sell
15.
114. Why doesn't providing everyone who wants a good with that good maximize total surplus?
a)
It would create too much consumer surplus
b)
It would create too much producer surplus
c)
Some trades would be wasteful as cost exceeds value
d)
It would lead to market shortages
16.
115. Which of the following is NOT a reason why equilibrium maximizes total surplus?
a)
Buyers with the highest value buy the good
b)
Sellers with the lowest cost produce the good
c)
There are no wasteful trades
d)
The government ensures fair distribution
17.
116. What is the correct formula for calculating total surplus for an individual item transaction?
a)
Total Surplus = Willingness To Pay - Price
b)
Total Surplus = Price - Cost
c)
Total Surplus = (Willingness To Pay - Price) + (Price - Cost)
d)
Total Surplus = Willingness To Pay + Cost
18.
117. In a market transaction, how is it possible for both the buyer and seller to be better off?
a)
Only the buyer benefits from the transaction
b)
Only the seller benefits from the transaction
c)
The transaction creates value from the difference between willingness to pay and cost
d)
The transaction always results in a zero-sum game
19.
118. At the equilibrium price, which statement is true about buyers and sellers?
a)
Buyers have lower value of the good than non-buyers
b)
Sellers have higher costs of the good than non-sellers
c)
Buyers have higher value of the good than non-buyers
d)
Sellers and buyers always have equal values and costs
20.
119. How many trades at the equilibrium price create negative total surplus?
a)
All trades
b)
Half of the trades
c)
One trade
d)
Zero trades
21.
120. What happens to total surplus if the price is set lower than the equilibrium price?
a)
Total surplus increases
b)
Total surplus remains the same
c)
Total surplus decreases
d)
Total surplus becomes negative
22.
121. If the price is below the equilibrium price, how does the market adjust?
a)
Demand increases until equilibrium is reached
b)
Supply decreases until equilibrium is reached
c)
The government intervenes to set the price
d)
Buyers compete, driving the price up to equilibrium
23.
122. Which of the following is NOT a reason why equilibrium maximizes total surplus?
a)
Buyers with the highest value buy the good
b)
Sellers with the lowest cost produce the good
c)
There are no wasteful trades
d)
The government ensures fair distribution
24.
123. Which of the following best describes the concept of scarcity in economics?
a)
The abundance of resources
b)
The limitation of human desires
c)
The mismatch between unlimited wants and limited resources
d)
The equal distribution of goods
25.
124. Around Valentine’s day, candy prices increase and the number sold also increases, this is consistent with what shift?
a)
Demand increases
b)
Demand decreases
c)
Supply increases
d)
Supply decreases
26.
125. Who determines the equilibrium price and quantity?
a)
buyers
b)
sellers
c)
buyers and sellers
d)
monopolists
27.
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?
a)
The supply curve shifts to the right which leads to a lower equilibrium price and higher equilibrium quantity.
b)
The supply curve shifts to the right which leads to a higher equilibrium price and higher equilibrium quantity.
c)
The supply curve shifts to the left which leads to a lower equilibrium price and lower equilibrium quantity.
d)
The supply curve shifts to the left which leads to a higher equilibrium price and lower equilibrium quantity.
28.
127. If there is a shortage in a market, the price will likely
a)
increase
b)
decrease
c)
remain unchanged
d)
change for some people
29.
128. When a consumer voluntarily buys a good, their consumer surplus (mark all that apply)
a)
Directly depends on the cost
b)
Can be negative
c)
Is never negative
d)
Directly depends on the price
30.
129. Lucy sells a cup of lemonade to Jonas for $3, it cost her $1 to produce, Jonas valued the lemonade at $3.50, what is Lucy’s Producer Surplus?
a)
$0.50
b)
$1.00
c)
$2.00
d)
$3.00
31.
130. Which of the following describes consumer surplus at the market level? (mark all that apply)
a)
It is the sum of each individual’s consumer surplus
b)
It is the sum of each individual’s consumer surplus minus cost
c)
Graphically it is represented by the area from the demand curve to the supply curve
d)
Graphically it is represented by the area from the demand curve to the price
32.
131. Pablo sells custom shoes that cost him $60 to make to Abi who would pay up to $160 for them. What is the total surplus created by this transaction?
a)
$60
b)
$100
c)
$160
d)
need to know the price
33.
132. Which of the following price quantity combinations maximizes total surplus?
a)
the equilibrium price and equilibrium quantity
b)
the lowest price (free) and the equilibrium quantity
c)
the price that maximizes profits and the equilibrium quantity
d)
the equilibrium price and the quantity that government decides is best
34.
133. Total Surplus is (mark all that apply):
a)
the sum of producer and consumer surplus.
b)
always positive when transactions are voluntary.
c)
graphically is represented by the area from the demand curve to the supply curve.
d)
greatest when prices are lowest.
35.
134. According to the law of demand, a decrease in price
a)
Shifts the demand curve to the left.
b)
Shifts the demand curve to the right.
c)
Does not shift the demand curve, but results in a movement ALONG the demand curve to the left.
d)
Does not shift the demand curve, but results in a movement ALONG the demand curve to the right.
e)
There will be no change.
36.
135. All of the following will shift the demand curve for oranges to the RIGHT except:
a)
An increase in the price of apples, a substitute for oranges.
b)
A new study shows that drinking fresh orange juice reduces the likelihood of kidney stones.
c)
A new technology for orange picking makes harvesting oranges cheaper.
d)
Consumers expect higher prices for oranges next month due to hurricanes destroying crops.
e)
All of the above shift the demand curve to the RIGHT.
37.
136. An increase in the price of yellow paint coating, an input for No. 2 pencils, will:
a)
Cause the demand curve for No. 2 pencils to shift to the right.
b)
Cause the supply curve for No. 2 pencils to shift to the left.
c)
Cause the demand curve for ballpoint pens, a substitute for pencils, to shift to the left.
d)
None of the above.
38.
137. An increase in the price of roses will:
a)
Definitely result in a shift to the right of the supply curve.
b)
Definitely result in an increase in the quantity demanded of roses.
c)
Definitely result in a decrease in the quantity demanded of roses.
d)
Definitely result in a shift to the left of the demand curve.
e)
Both A and C are true.
39.
138. An increase in the price of oat milk, a substitute for almond milk, will:
a)
Decrease the quantity demanded of almond milk.
b)
Increase the quantity demanded of oat milk.
c)
Shift the demand curve for oat milk to the left.
d)
Shift the demand curve for almond milk to the right.
40.
139. Take the market for fanny packs. If the price of a complement decreases,
a)
The demand curve for fanny packs will shift to the right.
b)
The demand curve for fanny packs will shift to the left.
c)
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.
d)
There will be no shift in the demand curve for fanny packs, but instead a movement along the demand curve to the left.
e)
The supply curve will shift right.
41.
140. Which of the following will cause a movement ALONG the supply curve for lumber?
a)
A new area of forest is purchased for logging (cutting trees for lumber)
b)
Consumer demand for decks and patios increases 10x fold.
c)
Labor costs increase, prompting loggers to have to pay more for lumberjacks.
d)
All of the above.
e)
None of the above.
42.
141. According to the law of supply, sellers will be more likely to increase their quantity supplied when
a)
They can sell their goods cheaply.
b)
When there are lots of suppliers in the market.
c)
When they are the only supplier of a good.
d)
When the selling price increases.
43.
142. When Joanna permanently closes the movie theater she ran in her hometown, this causes:
a)
A shift to the right of the supply curve for movie tickets.
b)
A shift to the left of the supply curve for movie tickets.
c)
A movement along the supply curve for movie tickets, that is a decrease in the quantity supplied.
d)
A shift to the left in the demand curve for movie tickets.
44.
143. What happens in the market for cheese when the price of milk decreases?
a)
The price of cheese decreases and equilibrium quantity stays the same.
b)
The price of cheese increases due to the increased demand (shift to the right) for milk.
c)
The price of cheese decreases and the quantity of cheese at equilibrium increases, since milk is an ingredient in cheese.
d)
The price of cheese is unrelated to the price of milk.
45.
144. Demand for toilet paper soared at the beginning of the pandemic. Some retailers maintained the same price for toilet paper. This generated a _______ because the quantity supplied was ______ than the quantity demanded.
a)
Shortage; greater
b)
Shortage; less
c)
Surplus; greater
d)
Surplus; less
46.
145. When quantity demanded is less than quantity supplied, there is a
a)
Shortage.
b)
Surplus.
c)
Market equilibrium.
d)
Price floor.
e)
None of the above.
47.
146. What is consumer surplus?
a)
The difference between the price paid and the cost to produce
b)
The difference between willingness to pay and the price
c)
The total amount spent by consumers
d)
The total revenue earned by producers
48.
147. Why is consumer surplus never negative?
a)
Because consumers always pay more than they value the product
b)
Because transactions are voluntary
c)
Because producers set prices below consumer value
d)
Because consumer surplus is calculated after discounts
49.
148. What does the area between the demand curve and the market price represent?
a)
Producer surplus
b)
Total revenue
c)
Consumer surplus
d)
Economic profit
50.
149. In a market experiencing a shortage, what will happen to the price to reach equilibrium?
a)
Price will increase
b)
Price will decrease
c)
Price will remain constant
d)
Price will fluctuate randomly
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