Exam 2
Week 7
1. Suppose Dawn, a rational artist, recently sold her painting for $950. Suppose further that
her reservation price for selling the painting was $800. Dawn’s producer surplus from this
sale was
a. -150
b. 0
c. 150
d. 800
e. 950
f. 1750
2. Suppose rational decision-maker GEna was considering purchasing a ticket to see
Springsteen in convert. Suppose further that the price of a ticket was $100 and her
reservation price for the ticket was $150. Instead of buing the ticket; however, she chose
to go to see a free concert. Everything else held constant, it can be concluded with
certainty that her consumer surplus from seeing the free concert (Beth) was
a. Greater than 150
b. Greater than 100
c. Greater than or equal to 100
d. Greater than 50
e. Greater than to equal to 50
Benefit Cost CS
Bruce 150 100 50
Beth ? 0 ?
She will choose what has the higher CS.
3. Suppose celery is normal good. Suppose further that income in the country are
decreasing, Everything else held constant, consumer surplus in the market for celery will.
a. Increase
b. Decrease
c. Unchanged
d. Be ambiguous
4. Suppose celery is normal good. Suppose further that income in the country is decreasing,
everything else held constant, producer surplus in the market for celery will.
a. Increase
b. Decrease
c. Unchanged
d. Be ambiguous
Week 7
1. Suppose Dawn, a rational artist, recently sold her painting for $950. Suppose further that
her reservation price for selling the painting was $800. Dawn’s producer surplus from this
sale was
a. -150
b. 0
c. 150
d. 800
e. 950
f. 1750
2. Suppose rational decision-maker GEna was considering purchasing a ticket to see
Springsteen in convert. Suppose further that the price of a ticket was $100 and her
reservation price for the ticket was $150. Instead of buing the ticket; however, she chose
to go to see a free concert. Everything else held constant, it can be concluded with
certainty that her consumer surplus from seeing the free concert (Beth) was
a. Greater than 150
b. Greater than 100
c. Greater than or equal to 100
d. Greater than 50
e. Greater than to equal to 50
Benefit Cost CS
Bruce 150 100 50
Beth ? 0 ?
She will choose what has the higher CS.
3. Suppose celery is normal good. Suppose further that income in the country are
decreasing, Everything else held constant, consumer surplus in the market for celery will.
a. Increase
b. Decrease
c. Unchanged
d. Be ambiguous
4. Suppose celery is normal good. Suppose further that income in the country is decreasing,
everything else held constant, producer surplus in the market for celery will.
a. Increase
b. Decrease
c. Unchanged
d. Be ambiguous
