Just Me

In: Business and Management

Submitted By marmareta
Words 7979
Pages 32
Name: ________________________ Class: ___________________ Date: __________

ID: A

Fall 2013 Midterm 2
Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Welfare economics is the study of how a. the allocation of resources affects economic well-being. b. a price ceiling compares to a price floor. c. the government helps poor people. d. a consumer’s optimal choice affects her demand curve. 2. Consumer surplus a. is the amount of a good that a consumer can buy at a price below equilibrium price. b. is the amount a consumer is willing to pay minus the amount the consumer actually pays. c. is the number of consumers who are excluded from a market because of scarcity. d. measures how much a seller values a good. Table 7-2 This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. Buyer Willingness To Pay David $8.50 Laura $7.00 Megan $5.50 Mallory $4.00 Audrey $3.50 ____ 3. Refer to Table 7-2. Which of the following is not true? a. At a price of $9.00, no buyer is willing to purchase Vanilla Coke. b. At a price of $5.50, Megan is indifferent between buying a case of Vanilla Coke and not buying one. c. At a price of $4.00, total consumer surplus in the market will be $9.00. d. All of the above are correct.

____

1

Name: ________________________ Table 7-6 Buyer Michael Earvin Larry Charles ____

ID: A

Willingness to Pay $500 $400 $350 $300

4. Refer to Table 7-6. You have an extra ticket to the Midwest Regional Sweet 16 game in the men’s NCAA basketball tournament. The table shows the willingness to pay of the four potential buyers in the market for a ticket to the game. You hold an auction to sell the ticket. Who makes the winning bid, and what does he offer to pay for the ticket? a. Michael; $501 b. Michael; more than $400 but less than or equal to $500 c. Earvin; $400…...

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