Multiple choice answers

CUNY Microeconomics Final.pdf Page 2 of 12 Multiple-Choice Questions 5) In the graph above, suppose the government mandates that the price of wheat rice can be no lower than $4 per bushel. What area(s) represent a transfer of welfare from consumers to producers as a result of this policy? For Questions 1 - 5, refer to the graph below. a) Area A b) Area B c) Areas (B+C) d) Area C e) Areas (A+B) 6) Suppose that John is willing to pay a maximum of 3 dollars per cup of regular coffee at a coffee shop on campus. What is John's consumer surplus from buying one cup of coffee if the actual price of coffee is 2 dollars per cup? a. $5 b. $3 1) In the graph above, suppose the government mandates that the price of wheat rice can c. $2 be no lower than $4 per bushel. Areas (C+G) in this scenario would be referred to as ... d. $1 e. $O a) net social welfare. b) a deadweight loss. 7) Suppose Luis, Madeleine, and Emma are the only consumers in the entire coffee market, c) consumer surplus. and that their maximum willingness to pay for a cup of coffee is $2, $3, and $2 d) producer surplus. respectively. Assume that the price of coffee is $1 per cup and that they each buy one e) marginal benefits. cup of coffee. What is the market consumer surplus? a. $7 2) In the graph above, suppose the government mandates that the price of wheat rice can $5 be no lower than $4 per bushel. What area(s) represent the producer surplus after the c. $4 implementation of this policy? d. $3 e. $0 a) Areas (B+C b) Areas (F+G) 8) Suppose that the cost of producing the 600th cup of coffee to the local coffee shop is $1, C) Areas (A+B+F) and the price of coffee is $1.40 per cup. What is the producer surplus of selling the 600th d) Areas (B+F) cup of coffee? e) Area F a. $2.40 b. $1.40 3) In the graph above, suppose the government mandates that the price of wheat rice can c. $1 be no lower than $4 per bushel. What areas represent the deadweight loss as a result of d. $0.40 this policy? e. $0 a) Areas (D+E) b) Areas (B+C) For Questions 9 and 10, refer to the graph below. C) Areas (C+G) d) Areas (F+G) e) Areas (A+B) 4) In the graph above, suppose the government mandates that the price of wheat rice can be no lower than $4 per bushel. What area(s) represent the consumer surplus after the Implementation of this policy? a) Area A b) Areas (A+B) C) Areas (A+B+C) d) Areas (B+C) e) Areas (A+B+F) 9) Suppose the solid line in the graph above illustrates Michaela's budget line. We can conclude that