C. The total value of what is now purchased by buyers is actually higher.

d. Consumer surplus in the market falls.

 

207. John buys good X, and would be willing to pay more than he now has to pay. Suppose that John has a change in his tastes such that he values good X more than before. If the market price is the same as before, then

a. John’s consumer surplus would be unaffected.

B. John’s consumer surplus would increase.

c. John’s consumer surplus would decrease.

d. John would be wise to buy less of good X than before.

 

208. Cost is a measure of the

A. seller’s willingness to sell.

b. seller’s producer surplus.

c. producer shortage.

d. seller’s willingness to buy.

 

209. A seller would be willing to sell a product ONLY IF

a. the price received is less than the cost of production.

B. the price received is at least as great as the cost of production.

c. the price received is equal to the cost of production.

d. the price received is at least double the cost of production.

 

210. Refer to the graph shown. What area represents consumer surplus when the price is P1?

a. A

B. B

c. C

d. D

211. Refer to the graph shown. What area represents producer surplus when the price is P1?

a. A

b. B

C. C

d. D

212. Refer to the graph shown. What area represents total surplus in the market when the price is P1?

a. A + B

b. B + C

c. C + D

d. A + B + C + D

213. Suppose that the demand for French bread increases. What will happen to producer surplus in the market for French bread?