An Informative Quiz On The Aspects Of Microeconomics
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This is an informative quiz on the aspects of microeconomics. The market would not exist if there were no consumers and producers. The level of consumption or production in a market is dependent on a lot of variables and we have covered them all in our past classes. Do you think that you have what it takes to handle the informative quiz on aspects of economics? Take it and find out!
- 1.Consumer surplus is the amount a buyer is willing to pay for a good minus the seller's cost
- A.
True
- B.
False
- 2.If the demand curve in a market is stationary, consumer surplus decreases when the price in the market increases
- A.
True
- B.
False
- 3.If your willingness to pay for a hamburger is $3.00 and the price is $2.00, your consumer surplus is $5.00
- A.
True
- B.
False
- 4.Producer surplus is a measure of the unsold inventories of suppliers in a market
- A.
True
- B.
False
- 5.Consumer surplus is a good measure of buyers' benefits if buyers are rational
- A.
True
- B.
False
- 6.Cost to the seller includes the opportunity cost of the seller's time
- A.
True
- B.
False
- 7.The height of the supply curve is the marginal seller's cost
- A.
True
- B.
False
- 8.Total surplus is the cost to sellers minus the value to buyers
- A.
True
- B.
False
- 9.Free markets are efficient because they allocate output to buyers who have a willingness to pay that is below the price
- A.
True
- B.
False
- 10.Producer surplus is the area above the supply curve and below the price
- A.
True
- B.
False
- 11.The major advantage of allowing free markets to allocate resources is that the outcome of the allocation is efficent
- A.
True
- B.
False
- 12.Equilibrium in a competitive market maximizes total surplus
- A.
True
- B.
False
- 13.The two main types of market failure are market power and externalities
- A.
True
- B.
False
- 14.Externalities are side effects, such as pollution, that are not taken into account by the buyers and sellers in a market
- A.
True
- B.
False
- 15.Producing more of a product always adds to total surplus
- A.
True
- B.
False
- 16.Consumer surplus is the area
- A.
Above the supply curve and below the price
- B.
Below the supply curve and above the price
- C.
Above the demand curve and below the price
- D.
Below the demand curve and above the price
- E.
Below the demand curve and above the supply curve
- 17.A buyer's willingness to pay is
- A.
That buyer's consumer surplus
- B.
That buyer's producer surplus
- C.
That buyer's maximum amount he is willing to pay for a good
- D.
That buyer's minimum amount he is willing to pay for a good
- E.
None of the above
- 18.If a buyer's willingness to pay for a new Honda is $20,000 and she i able to actually buy it for $18,000, her consumer surplus is
- A.
$0
- B.
$2,000
- C.
$18,000
- D.
$20,000
- E.
$38,000
- 19.An increase in the price of a good along a stationary demand curve
- A.
Increases consumer surplus
- B.
Decreases consumer surplus
- C.
Improves the material welfare of the buyers
- D.
Improves market efficiency
- 20.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 rpice is $25, how many vases will be sold and what is the value of consumer surplus in this market?
- A.
One vase will be sold, and consumer surplus is $30
- B.
One vase will be sold, and consumer surplus is $5
- C.
Two vases will be sold, and consumer surplus is $5
- D.
Three vases will be sold, and consumer surplus is $0
- E.
Three vases will be sold, and consumer surplus is $80
- 21.Producer surplus is the area
- A.
Above the supply curve and below the price
- B.
Below the supply curve and above the price
- C.
Above the demand curve and below the price
- D.
Below the demand curve and above the price
- E.
Below the demand curve and above the supply curve
- 22.If a benevolent planner chooses to produce less than the equilibrium quantity of a good, then
- A.
Producer surplus is maximized
- B.
Consumer surplus is maximized
- C.
Total surplus is maximized
- D.
The value placed on the last unit of production by buyers exceeds the cost of production
- E.
The cost of production on the last unit produced exceeds the value placed on it by buyers
- 23.If a benevolent social planner chooses to produce more than the equilibrium quantity of a good, then
- A.
Producer surplus is maximized
- B.
Consumer surplus is maximized
- C.
Total surplus is maximized
- D.
The value placed on the last unit of production by buyers exceeds the cost of production
- E.
The cost of production on the last unit produced exceeds the value placed on it by buyers
- 24.The seller's cost of production is
- A.
The seller's consumer surplus
- B.
The seller's producer surplus
- C.
The maximum amount the seller is willing to accept for a good
- D.
The minimum amount the seller is willing to accept for a good
- E.
None of the above
- 25.Total surplus is the area
- A.
Above the supply curve and below the price
- B.
Below the supply curve and above the price
- C.
Above the demand curve and below the price
- D.
Below the demand curve and above the price
- E.
Below the demand curve and above the supply curve
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