Chapter 05EfficiencyMultiple Choice Questions1.In economics, the concept of surplus:A.measures the benefit that people receive when they buy something for less than they would have been willing to pay.B.measures the benefit that people receive when they sell something for more than they would have been willing to accept.C.is the best way to look at the benefits people receive from successful transactions.D.All of these are true.2.The concept of surplus can:A.show who loses from international trade.B.show who benefits from a tax.C.show who loses from minimum wage.D.show any of these.3.The maximum price that a buyer would be willing to pay for a good or service is also called:A.the reservation price.B.the buyer-max price.C.the reserved max price.D.None of these terms is used.4.A consumers willingness to pay:A.is the maximum price that a buyer would be willing to pay for a good or service.B.is the minimum price that a buyer would be willing to pay for a good or service.C.is their reserved maximum bid-price.D.must always equal the sellers willingness to sell.5.Which of the following prices could represent Sallys willingness to pay for a pair of shoes if she bought them for $45?A.$15.00B.$25.00C.$44.99D.$55.006.If Billys reservation price on a snowboard is $250, how many snowboards would he buy if the market price of snowboards is $500?A.0B.1C.2D.The amount of snowboards purchased would depend on Billys income.7.If Claires reservation price on a sweater is $37, which of the following prices would she have to observe in the market in order to buy a sweater?A.$37.00B.$37.01C.$38.00D.Claire would not buy a sweater at any of these prices.8.Which of the following prices could represent Elis willingness to pay for a baseball glove if he observed the market price of $43 and decided not buy one?A.$37B.$45C.$50D.None of these could represent Elis willingness to pay.9.A sellers willingness to sell:A.is the maximum price that a seller is willing to accept in exchange for a good or service.B.is the minimum price that a seller is willing to accept in exchange for a good or service.C.is their reserved minimum bid-price.D.must always equal the buyers willingness to buy.10.A seller always wants to:A.sell for a price that is as high as possible, but never lower than his minimum.B.sell for a price that is as low as possible, but never higher than his maximum.C.sell for a price that is as high as possible, but never higher than his maximum.D.sell for a price that is as low as possible, but never lower than his minimum.11.A buyer always wants to:A.buy for a price that is as low as possible, but never higher than his maximum.B.buy for a price that is as high as possible, but never higher than his maximum.C.buy for a price that is as low as possible, but never lower than his minimum.D.buy for a price that is as high as possible, but never lower than his minimum.12.Willingness to pay represents:A.the point at which the benefit that a person will get from a good is equal to the benefit of spending the money on another alternative.B.the opportunity cost of a good.C.the buyers reservation price.D.All of these represent willingness to pay.13.The willingness to pay of buyers in a market:A.is represented by the demand curve.B.is represented by the supply curve.C.explains why the demand curve is bowed-out.D.explains why the demand curve is bowed-in.14.At prices above a consumers reservation price:A.the opportunity cost is greater than the benefit from having the good.B.the opportunity cost is less than the benefit from having the good.C.the buyer will purchase the good.D.None of these is true.15.At prices below a consumers maximum willingness to pay:A.the buyer will participate in the market because the opportunity cost is less than the benefit from having the good.B.the buyer will participate in the market because the opportunity cost is more than the benefit from having the good.C.the buyer will not participate in the market because the opportunity cost is less than the benefit from having the good.D.the buyer will not participate in the market because the opportunity cost is more than the benefit from having the good.16.Each sellers opportunity costs are:A.determined monetarily, which is why they can never be zero.B.determined by a number of factors, none of which is monetary.C.de