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Consider the hypothetical supply and demand of Kidneys. Consider the hypothetical supply and demand of Kidneys. If the government allows the buying and selling of kidneys,what will be the resulting price and quantity of kidneys? A) (0, 900) B) (1200, 2000) C) (1500, 900) D) No kidneys would be exchanged. If the government allows the buying and selling of kidneys,what will be the resulting price and quantity of kidneys?


A) (0, 900)
B) (1200, 2000)
C) (1500, 900)
D) No kidneys would be exchanged.

E) None of the above
F) C) and D)

Correct Answer

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According to the graph shown,if the market goes from equilibrium to having its price set at $10: A) deadweight loss will occur. B) seven fewer units will be exchanged. C) consumer surplus will decrease. D) All of these are true. According to the graph shown,if the market goes from equilibrium to having its price set at $10:


A) deadweight loss will occur.
B) seven fewer units will be exchanged.
C) consumer surplus will decrease.
D) All of these are true.

E) A) and B)
F) A) and C)

Correct Answer

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If Thelma's willingness to sell her homemade fudge is $4,then at which of the following prices would Thelma sell her fudge?


A) $2
B) $3.99
C) $4.01
D) Thelma would not sell her fudge at any of these prices.

E) B) and D)
F) A) and C)

Correct Answer

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According to the graph shown,if the market is in equilibrium,producer surplus is: A) $30. B) $20. C) $50. D) $60. According to the graph shown,if the market is in equilibrium,producer surplus is:


A) $30.
B) $20.
C) $50.
D) $60.

E) A) and C)
F) A) and B)

Correct Answer

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Assume there are three hardware stores,each willing to sell one standard model hammer in a given time period.House Depot can offer their hammer for a minimum of $7.Lace Hardware can offer the hammer for a minimum of $10.Bob's Hardware store can offer the hammer at a minimum price of $13. Given the scenario described,if the market price of hammers decreased from $15 to $10:


A) total producer surplus falls by $5.
B) producer surplus for each producer falls by $5.
C) Bob's Hardware no longer sells hammers.
D) total producer surplus falls by $15.

E) None of the above
F) All of the above

Correct Answer

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The creation of markets that were previously "missing":


A) can create winners and losers.
B) increases total surplus.
C) benefits those who interact in the new markets.
D) All of these are true.

E) None of the above
F) All of the above

Correct Answer

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A market has four individuals,each considering buying a grill for his backyard.Assume that grills come in only one size and model.Abe considers himself a grill-master,and finds a grill a necessity,so he is willing to pay $400 for a grill.Butch is a meat-lover,honing his grilling skills,and is willing to pay $350 for a grill.Collin just met the girl of his dreams,and she loves a good grilled steak,so in his effort to impress her he is willing to pay $320 for a grill.Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp,so he is willing to pay $200 for a grill. If the market price of grills increases from $300 to $325,given the scenario described:


A) Collin would drop out of the market.
B) Collin's surplus would decrease the most.
C) Collin is the only consumer who would be affected in terms of surplus.
D) Daniel's surplus would decrease.

E) B) and C)
F) A) and D)

Correct Answer

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According to the graph shown,consumer surplus is: A) $36. B) $72. C) $120 D) None of these. According to the graph shown,consumer surplus is:


A) $36.
B) $72.
C) $120
D) None of these.

E) C) and D)
F) A) and B)

Correct Answer

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Assume there are three hardware stores,each willing to sell one standard model hammer in a given time period.House Depot can offer their hammer for a minimum of $7.Lace Hardware can offer the hammer for a minimum of $10.Bob's Hardware store can offer the hammer at a minimum price of $13. Given the scenario described,if the market price of hammers increased from $8 to $11:


A) total producer surplus would increase to $5.
B) total producer surplus would decrease to $1.
C) total producer surplus would increase to $17.
D) total producer surplus would decrease to $7.

E) B) and C)
F) A) and B)

Correct Answer

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We say a market is "missing" when:


A) there is no place for potential buyers and sellers to exchange a particular good or service.
B) the quantity being exchanged is at or close to zero.
C) there is an absence of a well-functioning market, and total surplus is lower than it could be.
D) All of these are true.

E) None of the above
F) All of the above

Correct Answer

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A market has four individuals,each considering buying a grill for his backyard.Assume that grills come in only one size and model.Abe considers himself a grill-master,and finds a grill a necessity,so he is willing to pay $400 for a grill.Butch is a meat-lover,honing his grilling skills,and is willing to pay $350 for a grill.Collin just met the girl of his dreams,and she loves a good grilled steak,so in his effort to impress her he is willing to pay $320 for a grill.Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp,so he is willing to pay $200 for a grill. If the market price of grills is $320,given the scenario described,Abe's consumer surplus would be:


A) $400.
B) $350.
C) $320.
D) $80.

E) B) and D)
F) B) and C)

Correct Answer

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According to the graph shown,if the market goes from equilibrium to having its price set at $10 then: A) $12 gets transferred from consumer surplus to producer surplus. B) area C is lost consumer surplus due to fewer transactions taking place. C) area E is lost producer surplus due to fewer transactions taking place. D) All of these are true. According to the graph shown,if the market goes from equilibrium to having its price set at $10 then:


A) $12 gets transferred from consumer surplus to producer surplus.
B) area C is lost consumer surplus due to fewer transactions taking place.
C) area E is lost producer surplus due to fewer transactions taking place.
D) All of these are true.

E) C) and D)
F) B) and D)

Correct Answer

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Assume the market was in equilibrium in the graph shown.If the market price were set to $12,which of the following is true? A) For those still interacting in the market, some surplus is transferred from buyer to seller. B) For those still interacting in the market, some surplus is transferred from seller to buyer. C) Producers gain the surplus of those buyers who dropped out of the market. D) Consumers gain the surplus of those sellers who dropped out of the market. Assume the market was in equilibrium in the graph shown.If the market price were set to $12,which of the following is true?


A) For those still interacting in the market, some surplus is transferred from buyer to seller.
B) For those still interacting in the market, some surplus is transferred from seller to buyer.
C) Producers gain the surplus of those buyers who dropped out of the market.
D) Consumers gain the surplus of those sellers who dropped out of the market.

E) All of the above
F) C) and D)

Correct Answer

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Assume a market price gets set artificially low-that is,it gets set below the equilibrium price.This change means:


A) Every producer loses surplus, and it all gets transferred to consumers.
B) Some producers drop out of the market, and those left lose some surplus.
C) Every consumer gains surplus, due to the lower price now being charged.
D) None of these is true.

E) A) and B)
F) A) and C)

Correct Answer

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An example of a "missing" market would be:


A) the market to buy and sell children for adoption.
B) the market to buy and sell a kidney.
C) the market to buy and sell dates for a Friday night.
D) All of these markets are missing.

E) A) and B)
F) B) and D)

Correct Answer

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Surplus refers to:


A) the difference between the price at which a buyer or seller would be willing to trade and the actual price.
B) the difference between the willingness to pay and the actual price paid.
C) the difference between the willingness to sell and the actual price accepted.
D) All of these are true.

E) A) and B)
F) A) and C)

Correct Answer

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Consider the hypothetical supply and demand of Kidneys. Consider the hypothetical supply and demand of Kidneys. Initially,Kidney exchanges are regulated to donations only.This means kidneys can only be exchanged at a price of zero.What is the deadweight loss from this restriction? A) $0 B) $825,000 C) $1,350,000 D) $1200 Initially,Kidney exchanges are regulated to donations only.This means kidneys can only be exchanged at a price of zero.What is the deadweight loss from this restriction?


A) $0
B) $825,000
C) $1,350,000
D) $1200

E) B) and C)
F) C) and D)

Correct Answer

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Assume there are three hardware stores,each willing to sell one standard model hammer in a given time period.House Depot can offer their hammer for a minimum of $7.Lace Hardware can offer the hammer for a minimum of $10.Bob's Hardware store can offer the hammer at a minimum price of $13. Given the scenario described,if the market price of hammers decreased from $13 to $11:


A) total producer surplus would decrease from $9 to $5.
B) total producer surplus would increase from $5 to $9.
C) total producer surplus would decrease from $30 to $17.
D) total producer surplus would remain unchanged.

E) B) and C)
F) C) and D)

Correct Answer

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According to the graph shown,if the market goes from equilibrium to having its price set at $10 then: A) consumer surplus will decrease from (A + B + C) to (B + C) only. B) consumer surplus will increase from (A + B + C) to A only. C) consumer surplus (B + C) will transfer to producers. D) consumer surplus will decrease by (B + C) . According to the graph shown,if the market goes from equilibrium to having its price set at $10 then:


A) consumer surplus will decrease from (A + B + C) to (B + C) only.
B) consumer surplus will increase from (A + B + C) to A only.
C) consumer surplus (B + C) will transfer to producers.
D) consumer surplus will decrease by (B + C) .

E) C) and D)
F) A) and B)

Correct Answer

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Markets can be missing:


A) because a market is taxed.
B) when the sale of a particular service is banned.
C) when miscommunication of information between buyers and sellers leads to the wrong equilibrium price.
D) All of these are true.

E) B) and C)
F) C) and D)

Correct Answer

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