EXAM 2

Question 1

The amount the consumer is willing to pay minus the amount the consumer actually pays equals what?

Answer 1

The consumer surplus.

Question 2

What is the price a producer receives for a product minus the marginal cost of production?

Answer 2

This is the producer surplus

Question 3

What is the consumer surplus for Juan and Forrest?

Answer 3

$16 For Juan

$7 For Forrest

Question 4

Tupaks consumer surplus is _______ Juans because Tupak has a _____ Willingness to pay

Answer 4

Less

Lower

Question 5

How do you calculate marginal cost?

Answer 5

Take what the consumer is willing to minus what the producer is willing to charge.

Question 6

If a supplier has a cost that is between the equalibrium price and price ceiling will be squeezed our of the market if the government institutes a price what?

Answer 6

Price ceiling

Question 7

What does a price floor do for some consumers?

Answer 7

It pushes them out of the market