ECONOMICS 12
Chapter Six Assessments
Student Answer Sheet
Version 1
STUDENT NAME: ________________________________________
Tick √ your teacher’s name:
Ms. Mitchelle Chibuwe
Ms. Nicole de Jager
CHAPTER 7: Quiz
CHAPTER 7
Practical
Application
Mr. Marius Claasen
Mr. Michael Kirsch
CHAPTER 7:
Practical
Application
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TOTAL:
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BLOCK: _____
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Chapter 7 – Quiz
1) A consumer’s willingness to pay measures
A) The cost of a good to the buyer.
B) How much a buyer values a good.
C) How much a buyer has to pay to receive a good.
D) How much a seller receives from the sale of a good
2. Which are part of the definition of marginal utility?
A)
B)
C)
D)
The extra satisfaction a customer gets form a product
We can use price to help us measure marginal utility
We use marginal utility to help us create the demand curve
All of these are correct
3) Why do we study the concepts of consumer and producer surplus?
A)
B)
C)
D)
It helps us to simplify marginal utility and show it easier
It deals with welfare economics; how allocation of resources effects consumers
It deals with welfare economics; how allocation of resources effects society
It deals with how you share resources to certain groups in society
4) Consumer surplus is the area
A.) below the demand curve and above the price.
B) above the supply curve and below the price.
C) above the demand curve and below the price.
D). below the supply curve and above the price.
E) below the demand curve and above the supply curve.
5) Producer surplus is best defined as
A) the difference between consumer spending and revenue earned by producers.
B) the total benefit derived by producers when market is in equilibrium.
C) the additional benefit producers obtain when the price they are prepared to accept is
less than the price they actually receive
D the additional benefit producers obtain when the price they are prepared to pay is
greater than the price they actually pay
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6) What must the “benevolent social planner” consider in decisions for society?
A) How to maximize resources
B) Total surplus
C) Total profit
D) Total wellbeing of consumers
7) What is the difference between consumer surplus and total surplus?
A) Total surplus allows us to look at overall well being where consumer surplus considers
the benefit to consumers.
B). Total surplus is the total surplus to buyers and sellers where consumer surplus is only a
total of the surplus to buyers
C.) Total surplus allows us to analyze overall efficiency in society where consumer surplus
is only useful for analyzing the consumer
D) All are correct
E) None are correct.
8) 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.
9) Which is not an example of a market failure?
A) Externalities
B) Monopoly Power
C) Oligopolies
D) Fair prices
10. A supply curve can be used to measure producer surplus because it reflects
A)
B)
C)
D)
the actions of sellers.
quantity supplied.
sellers’ costs.
the amount that will be purchased by consumers in the market
End Quiz Section
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Chapter 7 – Practical
Graph 1
(Questions 1-7 are based on graph 1) WRITE NUMBERS ON ANSWER SHEET
1. In the graph above, what is the price that is actually paid? _____________
2. If Kristina’s willingness to pay is $7, what is her individual consumer surplus?
3. If Asia’s willingness to pay is $6, what is her individual consumer surplus?
4. If they are the only two buyers in this market, what is the total consumer surplus?
If the price changed to $4,
5.
6.
7.
What is Kristina’s new individual consumer surplus? ___________________
What is Asia’s new individual consumer surplus? _____________________
What would be the new consumer surplus? ____________________________
Graph 2
8. Refer to Graph 2. When the price is P1, consumer surplus is
a. A.
b. A + B.
c. A + B + C.
d. A + B + D.
9. Refer to Graph 2. When the price rises from P1 to P2, consumer surplus
a. increases by an amount equal to A.
b. decreases by an amount equal to B + C.
c. increases by an amount equal to B + C.
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d. decreases by an amount equal to C
10. Refer to the Graph 2 . At p1, the total value of consumers is ___.
a. A + B
b. B + C
c. D+ E
d. B + C + D+E
e. A+ B+C+ D+E
11. Refer to the graph 2. At p1, the total payment (expenditure) of consumers is ___.
A) A + B
B) B + C
C) D+ E
D) B + C + D+E
E) A+ B+C+ D+E
Graph 3
12.) In Graph 3, at equilibrium, consumer surplus is area
A) A+B+C.
B) E+F+G.
C) A.
D) A+ B+C + D+ E + F
13) In at equilibrium, producer surplus is area
A) G.
B) A.
C) A+B+C.
D) E+F+G.
14) Suppose Lauren, Leslie and Lydia all purchase bulletin boards for their rooms for $15 each.
Lauren’s willingness to pay was $35, Leslie’s willingness to pay was $25, and Lydia’s willingness to
pay was $30. Which of the three receives the most consumer surplus from her purchase?
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A.
Lauren
B.
Leslie
C.
Lydia
D.
They each received the same consumer surplus since they each paid the same for the
bulletin board.
Graph 4
14) Graph 4 shows the effect on the global market for tea, following a flood in the major tea growing
regions of India, shown as the shift in the supply to S1. Which of the following is true?
A.
Consumer surplus rises by area PLMN
B.
Demand will extent from K to L.
C.
The new area of consumer surplus is BLP minus AKLP
D.
Output in the market must eventually increase
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BUYER
WILLINGNESS TO PAY
MIKE
$50.00
SANDY
$30.00
JONATHAN
$20.00
HALEY
Table 1
$10.00
15.
If the table represents the willingness to pay of 4 buyers and the price of the product is $15,
then who would be willing to purchase the product?
A) Mike
B) Mike and Sandy
C). Mike, Sandy, and Jonathan
Mike, Sandy, Jonathan, and Haley
Graph 5
16. According to Graph 5, which area represents the increase in producer surplus when the price
rises from P1 to P2?
A). BCE
B) ACF
C) ABED
D) DEF
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Graph 6
(Question 17-20 based on graph 6)
17 According to the graph 6, when the price falls from P2 to P1, producer surplus
A) a.decreases by an amount equal to A.
B) decreases by an amount equal to A + C.
C) decreases by an amount equal to A + B.
D) increases by an amount equal to A + B
18. According to the graph 6, area B represents
A) A.producer surplus to new producers entering the market as the result of price rising from P1 to
P2.
B) The increase in consumer surplus that results from an upward-sloping supply curve.
C) An increase in producer surplus to every producer in the market
D) An increase in total surplus when sellers are willing and able to increase supply from Q1 to Q2.
19. According to the graph shown, when the price falls from P2 to P1, which of the following would
NOT be true?
A) .
B)
C)
D)
The sellers who still sell the good are worse off because they now receive less.
Some sellers leave the market because they are not willing to sell the good at the lower price.
The total cost of what is now sold by sellers is actually higher.
Producer surplus would fall by area A + B
.
20. According to the graph shown, when the price falls from P2 to P1, which of the following would
NOT be true?
A) . The sellers who still sell the good are worse off because they now receive less.
B) Some sellers leave the market because they are not willing to sell the good at the lower price.
C) The total cost of what is now sold by sellers is actually higher.
D)
Producer surplus would fall by area A + B
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