Name: 
 

2030.2.practice


Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
 
 
Figure 7-1
studyguide_files/i0020000.jpg
 

1. 
Refer to Figure 7-1. When the price is P1, consumer surplus is
a.
A.
b.
A + B.
c.
A + B + C.
d.
A + B + D.
 

2. 
Refer to Figure 7-1. At the price of P2, consumer surplus is
a.
A.
b.
B.
c.
A + B.
d.
A + B + C.
 

3. 
Refer to Figure 7-1. 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.
d.
decreases by an amount equal to C.
 

4. 
Refer to Figure 7-1. Area C represents
a.
the decrease in consumer surplus that results from a downward-sloping demand curve.
b.
consumer surplus to new consumers who enter the market when the price falls from P2 to P1 .
c.
an increase in producer surplus when quantity sold increases from Q2 to Q1 .
d.
a decrease in consumer surplus to each consumer in the market.
 

5. 
Refer to Figure 7-1. When the price rises from P1 to P2, which would NOT be true?
a.
The buyers who still buy the good are worse off because they now pay more.
b.
Some buyers leave the market because they are not willing to buy the good at the higher price.
c.
The total value of what is now purchased by buyers is actually higher.
d.
Consumer surplus in the market falls.
 
 
Figure 7-5
studyguide_files/i0080000.jpg
 

6. 
Refer to Figure 7-5. When the price is P2, producer surplus is
a.
A.
b.
A + C.
c.
A + B + C.
d.
D + E.
 

7. 
Refer to Figure 7-5. At the price of P1, producer surplus is
a.
A.
b.
A + B.
c.
C.
d.
A + B + C.
 

8. 
Refer to Figure 7-5. When the price falls from P2 to P1, producer surplus
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.
 

9. 
Refer to Figure 7-5. Area B represents
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.
 

10. 
Refer to Figure 7-5. 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.
 

11. 
Refer to Figure 7-5. Area A represents
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 total surplus when sellers are willing and able to increase supply from Q1 to Q2.
d.
the increase in producer surplus to those producers already in the market when price rises from P1 to P2 .
 
 
Figure 7-8
studyguide_files/i0150000.jpg
 

12. 
Refer to Figure 7-8. The equilibrium (market-clearing) price is
a.
P1.
b.
P2.
c.
P3.
d.
P4.
 

13. 
Refer to Figure 7-8. At the market-clearing equilibrium, total consumer surplus is represented by the area
a.
A.
b.
A + B + C.
c.
D + E + F.
d.
A + B + C + D + E + F.
 

14. 
Refer to Figure 7-8. At the market-clearing equilibrium, total producer surplus is represented by the area
a.
F.
b.
F + G.
c.
D + E + F.
d.
D + E + F + G + H.
 

15. 
Refer to Figure 7-8. At the market-clearing equilibrium, total surplus is represented by the area
a.
A + B + C.
b.
A + B + D + F.
c.
A + B + C + D + E + F.
d.
A + B + C + D + E + F + G + H.
 

16. 
Refer to Figure 7-8. The efficient price-quantity combination is
a.
P1 and Q1.
b.
P2 and Q2.
c.
P3 and Q1.
d.
P4 and 0.
 
 
Figure 8-1
studyguide_files/i0210000.jpg
 

17. 
Refer to Figure 8-1. If the market is in equilibrium, consumer surplus is represented by area
a.
A.
b.
B.
c.
C.
d.
D.
 

18. 
Refer to Figure 8-1. When the market is in equilibrium, producer surplus is represented by area
a.
A.
b.
B.
c.
C.
d.
D.
 

19. 
Refer to Figure 8-1. Total economic surplus would be represented by area
a.
A + B.
b.
B + C.
c.
C + D.
d.
A + D.
 
 
Figure 8-4
studyguide_files/i0250000.jpg
 

20. 
Refer to Figure 8-4. The equilibrium market price before the tax is imposed is:
a.
P1.
b.
P2.
c.
P3.
d.
impossible to determine.
 

21. 
Refer to Figure 8-4. The price buyers pay after the tax is
a.
P1.
b.
P2.
c.
P3.
d.
impossible to determine.
 

22. 
Refer to Figure 8-4. The price sellers receive after the tax is
a.
P1.
b.
P2.
c.
P3.
d.
impossible to determine.
 

23. 
Refer to Figure 8-4. Consumer surplus before the tax was levied is represented by area
a.
A.
b.
A + B + C.
c.
D + E + F.
d.
F.
 

24. 
Refer to Figure 8-4. Producer surplus before the tax is represented by area
a.
A.
b.
A + B + C.
c.
D + E + F.
d.
F.
 

25. 
Refer to Figure 8-4. After the tax is levied, consumer surplus is represented by area
a.
A.
b.
A + B + C.
c.
D + E + F.
d.
F.
 

26. 
Refer to Figure 8-4. After the tax is levied, producer surplus is represented by area
a.
A.
b.
A + B + C.
c.
D + E + F.
d.
F.
 

27. 
Refer to Figure 8-4. The tax caused a reduction in consumer surplus represented by area
a.
A.
b.
B + C.
c.
D + E.
d.
F.
 

28. 
Refer to Figure 8-4. The tax caused a reduction in producer surplus represented by area
a.
A.
b.
B + C.
c.
D + E.
d.
F.
 

29. 
Refer to Figure 8-4. The benefits to the government (total tax revenue) is represented by area
a.
A + B.
b.
B + D.
c.
D + F.
d.
C + E.
 

30. 
Refer to Figure 8-4. The total surplus (consumer, producer, and government) with the tax is represented by area
a.
A + B + C.
b.
D + E + F.
c.
A + B + D + F.
d.
C + E.
 

31. 
Refer to Figure 8-4. The loss in total welfare resulting from the levying of the tax is represented by area
a.
A + B + C.
b.
D + E + F.
c.
A + B + D + F.
d.
C + E.
 
 
Figure 9-10
studyguide_files/i0380000.jpg
 

32. 
Refer to Figure 9-10. Consumer surplus in this market before trade would be
a.
A.
b.
B + C.
c.
A + B + D.
d.
C.
 

33. 
Refer to Figure 9-10. Consumer surplus in this market after trade would be
a.
A.
b.
C + B.
c.
A + B + D.
d.
B + C + D.
 

34. 
Refer to Figure 9-10. Producer surplus in this market before trade would be
a.
C.
b.
B + C.
c.
A + B + D.
d.
B + C + D.
 

35. 
Refer to Figure 9-10. Producer surplus in this market after trade would be
a.
C.
b.
C + B.
c.
A + B + D.
d.
B + C + D.
 

36. 
Refer to Figure 9-10. Producer surplus plus consumer surplus in this market before trade is
a.
A + B.
b.
A + B + C.
c.
A + B + C + D.
d.
B + C + D.
 

37. 
Refer to Figure 9-10. Producer surplus plus consumer surplus in this market after trade is
a.
A + B.
b.
A + B + C.
c.
A + B + C + D.
d.
B + C + D.
 

38. 
Refer to Figure 9-10. The change in total surplus in this market because of trade is
a.
A.
b.
B.
c.
C.
d.
D.
 
 
Figure 9-13
studyguide_files/i0460000.jpg
 

39. 
Refer to Figure 9-13. The free-trade price and domestic quantity demanded would be
a.
P1, Q1.
b.
P1, Q4.
c.
P2, Q2.
d.
P2, Q3.
 

40. 
Refer to Figure 9-13. The domestic price and domestic quantity demanded after the tariff would be
a.
P1, Q1.
b.
P1, Q4.
c.
P2, Q2.
d.
P2, Q3.
 

41. 
Refer to Figure 9-13. Consumer surplus with free trade would be
a.
A.
b.
A + B.
c.
A + C + G.
d.
A + B + C + D + E + F.
 

42. 
Refer to Figure 9-13. Producer surplus with free trade would be
a.
G.
b.
C + G.
c.
A + C + G.
d.
A + B + C + G.
 

43. 
Refer to Figure 9-13. Consumer surplus after the tariff would be
a.
A.
b.
A + B.
c.
A + C + G.
d.
A + B + C + D +E + F.
 

44. 
Refer to Figure 9-13. Producer surplus after the tariff would be
a.
G.
b.
C + G.
c.
A + C + G.
d.
A + B + C + G.
 

45. 
Refer to Figure 9-13. As a result of the tariff, government revenue would be
a.
E.
b.
B.
c.
D + F.
d.
B + D + E + F.
 

46. 
Refer to Figure 9-13. As a result of the tariff, deadweight loss would be
a.
E.
b.
B.
c.
D + F.
d.
B + D + E + F.
 



 
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