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WorksheetsIFY - Consumer and Producer Surplus quiz
Total questions: 17
Worksheet time: 15mins
A limited edition package is sold only to 200 customers for $130 each. The average value of the package for the 200 customers is $180. What is the total consumer surplus?
$130
$180
$26,000
$36,000
$10,000
What should we expect to happen if the consumer surplus of a trade is negative?
The consumer gains no value from the trade.
The consumer loses value from the trade.
The consumer’s gain from trade is the absolute value of the consumer surplus.
The trade does not happen.
What does producer surplus measure?
The difference between what producers receive and their minimum acceptable price
The profit made by producers
The total cost of production
The quantity of goods supplied
A price increase affects consumer surplus in which of the following ways?
It decreases consumer surplus.
It increases consumer surplus.
It has no effect on consumer surplus.
It causes consumer surplus to remain constant.
How does a price decrease affect producer surplus?
It increases producer surplus
It decreases producer surplus
It has no effect on producer surplus
It depends on the elasticity of supply
A producer is willing to sell a product for $15 but sells it at $25. What is the producer surplus?
$10
$25
$15
$40
How does a price ceiling below equilibrium affect consumer and producer surplus?
Consumer surplus may increase for some buyers
Producer surplus decreases
Total surplus remains the same
Deadweight loss occurs
If new technology reduces production costs, what happens?
Producer surplus may increase
Consumer surplus may increase due to lower prices
The supply curve shifts right
The use of technology has increased the cost of production
Suppose there are three identical vases available to be purchased. Buyer 1 is willing to pay $30 for one, buyer 2 is willing to pay $25 for one, and buyer 3 is willing to pay $20 for one. If the price is $25, how many vases will be sold and what is the total consumer surplus in this market?
One vase will be sold, and consumer surplus is $30
One vase will be sold, and consumer surplus is $5
Two vases will be sold, and total consumer surplus is $5
Three vases will be sold, and consumer surplus is $0
Three vases will be sold, and consumer surplus is $80
Total surplus (the sum of TCS and TPS) is the area
above the supply curve and below the price
below the supply curve and above the price
above the demand curve and below the price
below the demand curve and above the price
below the demand curve and above the supply curve
Consumer surplus is the (a) between what consumers are willing to pay and what they actually pay.
What area represents producer surplus in the graph shown here if this market is in equilibrium?
P2MP0
P4MP2
LMN
P4PLN
P0MP4
You are the manager of Fun World, a small amusement park that charges per ride. The diagram shows the demand curve for a typical customer. At $5 per ride, what is the total consumer surplus?
$5
$15
$25
$50
If a buyer's willingness to pay for a new Honda Civic is £35,500 and she is able to actually buy it for £32,000, her consumer surplus is
£7,500
£2,500
£3,500
£67,500
2 This diagram shows a market for short weekend breaks in a hotel, which is in equilibrium at P1Q1.
Which ONE of the following statements can be inferred from the information provided
Price elasticity of supply is constant along the supply curve
Demand is price inelastic
Price and quantity supplied have an inverse relationship
Consumer surplus is greater than producer surplus
The diagram shows the market for books.
A decrease in demand from D1 to D2 will cause a fall in
Producer Surplus to P2JY
Producer surplus to P2YK
Consumer surplus to P2YQ2
Consumer surplus to LXP1
What is the significance of consumer surplus in market analysis?
Consumer surplus measures the benefit or value that producers receive from selling a product at a price higher than their cost.
Consumer surplus measures the benefit or value that consumers receive from purchasing a product at a price lower than their willingness to pay.
Consumer surplus is irrelevant in market analysis.
Consumer surplus measures the cost or value that consumers incur from purchasing a product at a price higher than their willingness to pay.
