Chapter 7 students.doc

Chapter 7 Consumers, Producers, and the Efficiency of Markets MULTIPLE CHOICE 1、Positive analysis refers to what a. is. b. should be. c. could be. d. is politically correct. 2、The particular price that results in quantity supplied being equal to quantity demanded is the best price because it a. maximizes costs of the seller. b. maximizes the profit of buyers. c. maximizes the total welfare of buyers and sellers. d. minimizes the expenditure of buyers. 3、Willingness to pay measures the a. amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. b. amount a seller actually receives for a good minus the minimum amount the seller is willing to accept. c. maximum amount a buyer is willing to pay minus the minimum amount a seller is willing to accept. d. maximum amount that a buyer will pay for a good. 4、Consumer surplus is a. a buyer’s willingness to pay minus the price. b. a buyer’s willingness to pay plus the price. c. the price of the product minus the buyer’s willingness to pay. d. when the buyer’s willingness to pay and the price of the product are equal. 5、Consumer surplus measures a. the amount of a product a consumer can buy at a price below equilibrium price. b. the difference between the amount a consumer has to pay and the amount the consumer was willing to pay. c. the number of consumers who are excluded from a market because of scarcity. d. how much a buyer values a good. 6、If a consumer is willing and able to pay $15.00 for a particular good but the price of the good is $17.00, then the a. consumer would have consumer surplus of $2.00. b. consumer would increase his/her willingness and ability to pay by earning more. c. consumer would not purchase the good and would not have any consumer surplus. d. market must not be a perfectly competitive market.. 7、Amy buys a new dog for $150. She receives consumer surplus of $100 on her purchase. Her willingness to pay is a. $50. b. $100. c. $150. d. $250.