Eec Exam 2 UPDATED ACTUAL QUESTIONS
AND CORRECT ANSWERS
1. Consumer surplus is: - CORRECT ANSWER d. the difference between the price that
consumers are willing to pay for a good and the amount they actually pay.
2. Ahmed, Boris, Roberto, and Sunil all want to attend a football game. The admission price
is $48. Ahmed is willing to pay $59 for the ticket. Boris is willing to pay $39. Roberto is
willing to pay $45 and Sunil is willing to pay $55. Based on this information, who will go to
the game? - CORRECT ANSWER c. Ahmed and Sunil
3. Samia is willing to pay $10 for one bracelet and $5 for a second. Isabella is willing to pay
$12 for one bracelet and $2 for a second. If the price is currently $8 per bracelet, what is the
total consumer surplus after Samia and Isabella make their purchases? - CORRECT
ANSWER b. $6
4. Javier and Pierre each want to buy an ice cream cone. Javier is willing to pay $2.50 and
Pierre is willing to pay $4.00. If the ice cream cone costs $2.25, what is the total consumer
surplus after Javier and Pierre make their purchases? - CORRECT ANSWER c. $2.00
5. Graciela is willing to sell 1 dozen roses for $50, while Giuseppe is willing to sell 1 dozen
roses for $60. Carlos is willing to buy 1 dozen roses for $60, while Yuriko is willing to pay
$50. If the market price is $52, how many roses are sold and what is the sum total of
consumer and producer surplus after the transaction(s)? - CORRECT ANSWER a. One
dozen roses will be sold, and the total consumer and producer surplus will be $10.
6. In a voluntary exchange: - CORRECT ANSWER d. both the producer and the
consumer can experience a net benefit.
7. Which of the following is not an instance of market failure? - CORRECT
ANSWER c. A bad harvest increases the price of oranges.
8. Economic theory asserts that: - CORRECT ANSWER b. both producers and
consumers gain from trade.
, 9. An efficient outcome is one in which: - CORRECT ANSWER d. no individual can
be made better off without making someone else worse off.
10. Mario is willing to mow one lawn for $18; he will mow a second for $22, and a third for
$28. Assume that the market rate for lawn mowing is $24. How many lawns will Mario
mow? What will be his total revenue? What will be his producer surplus? - CORRECT
ANSWER a. Mario will mow two lawns for a total revenue of $48, and his producer
surplus will be $8.
11. Market failure arises when the market fails to: - CORRECT ANSWER a. achieve
an efficient outcome.
12. Which area on a graph showing a firm's supply curve represents producer surplus? -
CORRECT ANSWER b. the area above the supply curve up to a line indicating price
13. Producer surplus is: - CORRECT ANSWER d. the difference between the price that
producers receive and the amount for which they are willing to sell the good.
14. Consumer surplus is positive when: - CORRECT ANSWER d. the price the
consumer is willing to pay is more than the market price.
15. Producer surplus is positive when: - CORRECT ANSWER c. the price the producer
is willing to charge is less than the market price.
1. Which of the following is not a predictable result of a price ceiling? - CORRECT
ANSWER b. exorbitant profits for producers of the good
2. Why did the U.S. experience a gasoline shortage in 1979? - CORRECT ANSWER a.
because the price of gas was legally prevented from rising to its equilibrium level
AND CORRECT ANSWERS
1. Consumer surplus is: - CORRECT ANSWER d. the difference between the price that
consumers are willing to pay for a good and the amount they actually pay.
2. Ahmed, Boris, Roberto, and Sunil all want to attend a football game. The admission price
is $48. Ahmed is willing to pay $59 for the ticket. Boris is willing to pay $39. Roberto is
willing to pay $45 and Sunil is willing to pay $55. Based on this information, who will go to
the game? - CORRECT ANSWER c. Ahmed and Sunil
3. Samia is willing to pay $10 for one bracelet and $5 for a second. Isabella is willing to pay
$12 for one bracelet and $2 for a second. If the price is currently $8 per bracelet, what is the
total consumer surplus after Samia and Isabella make their purchases? - CORRECT
ANSWER b. $6
4. Javier and Pierre each want to buy an ice cream cone. Javier is willing to pay $2.50 and
Pierre is willing to pay $4.00. If the ice cream cone costs $2.25, what is the total consumer
surplus after Javier and Pierre make their purchases? - CORRECT ANSWER c. $2.00
5. Graciela is willing to sell 1 dozen roses for $50, while Giuseppe is willing to sell 1 dozen
roses for $60. Carlos is willing to buy 1 dozen roses for $60, while Yuriko is willing to pay
$50. If the market price is $52, how many roses are sold and what is the sum total of
consumer and producer surplus after the transaction(s)? - CORRECT ANSWER a. One
dozen roses will be sold, and the total consumer and producer surplus will be $10.
6. In a voluntary exchange: - CORRECT ANSWER d. both the producer and the
consumer can experience a net benefit.
7. Which of the following is not an instance of market failure? - CORRECT
ANSWER c. A bad harvest increases the price of oranges.
8. Economic theory asserts that: - CORRECT ANSWER b. both producers and
consumers gain from trade.
, 9. An efficient outcome is one in which: - CORRECT ANSWER d. no individual can
be made better off without making someone else worse off.
10. Mario is willing to mow one lawn for $18; he will mow a second for $22, and a third for
$28. Assume that the market rate for lawn mowing is $24. How many lawns will Mario
mow? What will be his total revenue? What will be his producer surplus? - CORRECT
ANSWER a. Mario will mow two lawns for a total revenue of $48, and his producer
surplus will be $8.
11. Market failure arises when the market fails to: - CORRECT ANSWER a. achieve
an efficient outcome.
12. Which area on a graph showing a firm's supply curve represents producer surplus? -
CORRECT ANSWER b. the area above the supply curve up to a line indicating price
13. Producer surplus is: - CORRECT ANSWER d. the difference between the price that
producers receive and the amount for which they are willing to sell the good.
14. Consumer surplus is positive when: - CORRECT ANSWER d. the price the
consumer is willing to pay is more than the market price.
15. Producer surplus is positive when: - CORRECT ANSWER c. the price the producer
is willing to charge is less than the market price.
1. Which of the following is not a predictable result of a price ceiling? - CORRECT
ANSWER b. exorbitant profits for producers of the good
2. Why did the U.S. experience a gasoline shortage in 1979? - CORRECT ANSWER a.
because the price of gas was legally prevented from rising to its equilibrium level
