41) In Figure 6.2, the producer surplus is:
42) If the good in Figure 6.2 were free:
A) producer surplus would not change but consumer expenditure would be minimized.
B) producer surplus and consumer expenditure would both be maximized.
C) producer surplus and consumer expenditure would both be zero.
D) producer surplus would be maximized but consumer expenditure would be minimized.
43) As price falls along a particular supply curve, producer surplus:
B) remains constant.
C) increases rapidly.
D) increases a very small bit.
44) As price falls along a supply curve, ________ increase(s) while ________ decrease(s).
A) nothing; quantity supplied, producer surplus, and revenues
B) producer surplus and price; quantity supplied and revenues
C) quantity supplied and price; producer surplus and revenues
D) revenues, quantity supplied, and price; producer surplus
45) In order for a market to reach equilibrium producers must have enough information to make informed decisions about purchasing the product.
46) Consumer surplus increases as the price of a good decreases.
47) If the market price of a DVD is $15 and a consumer was willing to pay $20 for it, that consumers surplus on the DVD is $5.
48) Consumer surplus is price less willingness to sell.
49) Producer surplus equals the market price less the producer's willingness to accept or marginal cost.
50) Producer surplus increases as the price of a good decreases.
51) If the marginal cost of a candy bar is $.10 and the producer sells it for $1.00, then the producers surplus on that candy bar is $1.10.
52) People often complain about paying "outrageously high prices." Define an "outrageously high price" in terms of consumer surplus.
53) What is consumer surplus and how is it calculated?
54) What is willingness to accept?
55) What is producer surplus?