ECON-1B Week 1 Quiz

ECON-1B Week 1 Quiz | Cabrillo College

Question 1

The difference between the highest price a consumer is willing to pay for a good and the price the consumer actually pays is called  

consumer surplus. 

producer surplus.  

the substitution effect.  

the income effect.

 

 

Question 2

Paul goes to Sportsmart to buy a new tennis racquet. He is willing to pay $200 for a new racquet, but buys one on sale for $125. Paul's consumer surplus from the purchase is

  

$75.  

$200.  

$125. 

$325.

Question 3

Lucinda buys a new GPS system for $250. She receives consumer surplus of $75 from the purchase. How much does Lucinda value her GPS system?

  

$325 

$75 

$175  

$250

 

Question 4

Marginal benefit is equal to the ________ benefit to a consumer receives from consuming one more unit of a good or service.

  

total  

unintended  

surplus 

additional

 

 

Question 5

Marginal cost is 

the average cost of producing a good or service.  

the total cost of producing one unit of a good or service.  

the difference between the lowest price a firm would have been willing to accept and the price it actually receives.  

the additional cost to a firm of producing one more unit of a good or service.

 

 

Question 6

The total amount of producer surplus in a market is equal to  

the area above the market supply curve.  

the difference between quantity supplied and quantity demanded.  

the area above the market supply curve and below the market price.  

the area between the demand curve and the supply curve below the market price.

 

Question 7

Figure 4-1 shows Arnold's demand curve for burritos.

Refer to Figure 4-1. Arnold's marginal benefit from consuming the third burrito is

  

$1.25. 

$1.50.  

$2.50.  

$6.00.

 

Question 8

Figure 4-1

Figure 4-1 shows Arnold's demand curve for burritos.

Refer to Figure 4-1. If the market price is $1.00, what is the consumer surplus on the third burrito?

  

$1.50  

$1.00 

$7.50  

$0.50

 

Question 9

Suppliers will be willing to supply a product only if

  

the price received is less than the additional cost of producing the product.  

the price received is at least equal to the additional cost of producing the product.  

the price received is at least double the additional cost of producing the product.  

the price is higher than the average cost of producing the product.

 

 

Question 10

Economic efficiency in a competitive market is achieved when 

economic surplus is equal to consumer surplus.

 

  

producer surplus equals the total amount firms receive from consumers minus the cost of production.  

consumers and producers are satisfied.  

the marginal benefit equals the marginal cost from the last unit sold.

 

 

Question 11

 

Figure 4-3 shows the market for tiger shrimp. The market is initially in equilibrium at a price of $15 and a quantity of 80. Now suppose producers decide to cut output to 40 in order to raise the price to $18.

 

 

Refer to Figure 4-3. What is the value of consumer surplus at a price of $18?

  

$120  

$180  

$240  

$60

 Question 12

Figure 4-3 shows the market for tiger shrimp. The market is initially in equilibrium at a price of $15 and a quantity of 80. Now suppose producers decide to cut output to 40 in order to raise the price to $18.

 

 

Refer to Figure 4-3. What is the value of producer surplus at a price of $18?

  

$240  

$300 

$340  

$720

 

 

Question 13

If, in a competitive market, marginal benefit is less than marginal cost 

the quantity sold is greater than the equilibrium quantity.  

the government must force producers to raise prices in order to achieve economic efficiency.  

the net benefit to consumers from participating in the market is less than the net benefit to producers.  

the quantity sold is less than the equilibrium quantity.

 

 

Question 14

Table 4-4

Hourly Wage

(dollars)               Quantity of Labor Supplied          Quantity of Labor Demanded

  $7.50   530,000 650,000

   8.50     550,000 630,000

   9.50     570,000 610,000

 10.50    590,000 590,000

 11.50    610,000 570,000

 12.50    630,000 550,000

 

 

Table 4-4 shows the demand and supply schedules for labor market in the city of Pixley.

 

 

Refer to Table 4-4. What is the equilibrium hourly wage (W*) and the equilibrium quantity of labor (Q*)?

  

W* = $11.50; Q* = 570,000  

W* = $10.50; Q* = 590,000  

W* = $10.50; Q* = 1,200,000  

W* = $9.50; Q* = 570,000

 

Question 15

Table 4-4

Hourly Wage

(dollars)               Quantity of Labor Supplied          Quantity of Labor Demanded

  $7.50   530,000 650,000

   8.50     550,000 630,000

   9.50     570,000 610,000

 10.50    590,000 590,000

 11.50    610,000 570,000

 12.50    630,000 550,000

 

 

Table 4-4 shows the demand and supply schedules for labor market in the city of Pixley.

 

 

Refer to Table 4-4. If a minimum wage of $11.50 an hour is mandated, what is the quantity of labor demanded?

  

570,000

1,180,000  

40,000  

610,000

 

 

Question 16

Rent control is an example of

  

a subsidy for low-skilled workers.

 

  

a black market.  

a price floor. 

a price ceiling.

 

 

Question 17

To affect the market outcome, a price ceiling

  

must be set below the price floor.  

must be set below the legal price.  

must be set below the black market price. 

must be set below the equilibrium price.

 

Question 18

 

 

Figure 4-5 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month.

 

 

Refer to Figure 4-5. What is the value of consumer surplus after the imposition of the ceiling?

  

$230,000  

$120,000  

$430,000  

$270,000

 

 

Question 19

 

Figure 4-5 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month.

 

 

Refer to Figure 4-5. What is the value of producer surplus after the imposition of the ceiling?

  

$40,000  

$300,000 

$430,000  

$100,000

 

Question 20

 

Figure 4-5 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month.

 

 

Refer to Figure 4-5. What is the value of the portion of producer surplus transferred to consumers as a result of the rent ceiling?

  

$40,000  

$140,000 

$125,000  

$100,000