TEST BANKSIXTH EDITIONCHAPTER 9THE ANALYSIS OF COMPETITIVE MARKETSCHAPTER 9The Analysis of Competitive MarketsMULTIPLE CHOICESection 9.1easy1. Refer to Figure 9.1. If the market is in equilibrium, the consumer surplus earned by the buyer ofthe 1st unit isa. S5.00b. SI 5.00c. S22.50d. S40.00easy2. Refer to Figure 9.If the market is in equilibrium, the producer surplus earned by the seller ofthe 1st unit isa. S5.00b. SI 0.00c. SI 5.00d. S20.00e. S40.00moderate 3. Refer to Figure 9.IF the market is in equilibrium, total consumer surplus isa. $30.b. S70.c. S400.d. S800.e. SI 200.moderate 4. Refer to Figure 9.If the market is in equilibrium, total producer surplus isa. $30.b. S70.c. S400.d. S800.e. SI 200.easyeasymoderatemoderateeasyeasy5. Refer to Figure 9.IF the market is in equilibrium, total consumer and producer surplus isa. SO.b. Si 00.c. S800.d. $1200.e. S2000.6. Refer to Figure 9.IF the government establishes a price ceiling of S20, how many widgets will be sold?a. 20b. 30c. 40d. 50e. 607. Refer to Figure 9.1. Suppose the market is currently in equilibrium. If the government establishes a price ceiling of S20. consumer surplus willa. fall by S200.b. fall by S300.c. remain the same.d. rise by S200.e. rise by S300.8. Refer to Figure 9.Suppose the market is currently in equilibrium. If the government establishes a price ceiling ofS20. producer surplus willa. fall by S200.h.fall by $300.c. remain the same.d. rise by S200.e. rise by S300.9. Refer to Figure 9.If the government establishes a price ceiling of S20, the resulting deadweight loss will bea. SO.b. S20.c. S30.d. S300.e. S600.10. Refer to Figure 9.If the government establishes a price ceiling of S20, total consumer and producer surplus will bea. $30.b. S400.c. S600.d. S900.e. SI200.323easy11. Consumer surplus measuresa. the extra amount that a consumer must pay to obtain a marginal unit of a good or service.b. the excess demand that consumers have when a price ceiling holds prices below their equilibrium.c. the benefit that consumers receive from a good or service beyond what they pay.d. gain or loss to consumers from price fixing.easy12. When government intervenes in a competitive market by imposing an effective price ceiling, we would expect the quantity supplied toand the quantity demanded toa. fall;riseb. fall;fallc. rise;rised. rise;falleasy13. Producer surplus is measured as thea. area under the demand curve above market price.b. entire area under the supply curve.c. area under the demand curve above the supply curve.d. area above the supply curve up to the market price.easy14. In an unregulated, competitive market consumer surplus exists because somesellers are willing to take a lower price than the equilibrium price. consumers are willing to pay more than the equilibrium price.sellers will only sell at prices above equilibrium price (or actual price), consumers are willing to make purchases only if the price is below the actual price.easy15. In an unregulated, competitive market producer surplus exists because somea. consumers are willing to pay more than the equilibrium price.b. producers are willing to take more than the equilibrium price.c. producers are willing to sell at less than the equilibrium price.d. consumers are willing to purchase, but only at prices below equilibrium price.easy16. Deadweight loss refers toa. losses in consumer surplus associated with excess government regulations.b. situations where market prices fail to capture all of the costs and benefits of a policy.c. net losses in total surplus.d. losses due to the policies of labor unions.easy17. In 1970s the federal government imposed price controls on natural gas. Which of the following statements is true?a. These price controls caused a chronic excess supply of natural gas.h.Consumers gained from the price controls, because consumer surplus was larger than itwould have been under free market equilibrium.c. Producers gained from the price controls because producer surplus was larger than it would have been under free market equilibrium.d. This episode of price controls was unusual, because it resulted in no deadweight loss to society.moderate 18. An effective price ceiling causes a loss ofa. producer surplus for certain and possibly consumer surplus as well.b. consumer surplus only.c. producer surplus only.d. consumer surplus for certain and possibly producer surplus as well.e. neither producer nor consumer surplus.moderate19. Price ceilings can result in a net loss in consumer surplus when thecurve isa. demand; very elasticb. demand; very inelasticc. supply; very inelasticd. none of the above; price ceilings always incr