Exam (elaborations)
ECON 101|WINTER 2024|ANSWER KEY QUIZ 2WINTER 2024 QUIZ 2
- Course
- ECON 101
- Institution
- University Of Michigan
ECON 101|WINTER 2024|ANSWER KEY QUIZ 2WINTER 2024 QUIZ 2
[Show more]
Content preview
ECON 101-200Winter 2024
Quiz 2
75 Points Possible
Version: 1
Name: KEY
Student ID Number:
[Please Print Clearly]
Question ‘X’:
Note:
This quiz is closed notes and book. Use of any outside resources (aside from a pencil, eraser, and
basic calculator) will be considered an act of academic misconduct.
Point values are listed on each question, in each part where relevant.
Be sure to print your multiple-choice answer clearly in the boxes
provided. Other marks will be ignored!!!
Assume demand slopes downward and supply slopes upward unless otherwise stated.
Assume demand and supply curves are straight lines, unless otherwise stated.
FYI: Multiple Choice are sorted alphabetically or numerically to ensure the answer is random.
You have 60 minutes from when the GSI starts the timer.
Good luck!!
, Econ 101-200 Winter 2024 Quiz 2 – Version 1
Name ID#
(Consumer and Producer Surplus) There are 9 potential consumers of Blue Nile diamond rings in Ann Arbor, each willing to buy
only one diamond ring. Their demand is shown below. [Hint: Assume a consumer buys a ring when the price in the market is the same
as their willingness to pay.]
Demand for Blue Nile Diamond Rings
$12,000
$10,500
$9,000
Price per ring
$7,500
$6,000
$4,500
$3,000 For #3 and #4
$1,500
$0
0 1 2 3 4 5 6 7 8 9 10
Diamond Rings
Question 1:
1. [3 points] Assuming the consumers are in the same order as depicted in the demand curve, what is the first consumer’s
willingness to pay for a diamond ring?
A. $12,000 D. $7,500 G. $3,000
B. $10,500 E. $6,000 H. $1,500
C. $9,000 F. $4,500 I. $0
Question 2:
2. [3 points] Assuming the consumers are in the same order as depicted in the demand curve, what is the sixth
consumer’s willingness to pay for a diamond ring?
A. $12,000 D. $7,500 G. $3,000
B. $10,500 E. $6,000 H. $1,500
C. $9,000 F. $4,500 I. $0
Question 3:
3. [3 points] Assume the price of a diamond ring is $3,000. How many rings will be purchased?
A. 0 diamond rings E. 4 diamond rings I. 8 diamond rings
B. 1 diamond ring F. 5 diamond rings J. 9 diamond rings
C. 2 diamond rings G. 6 diamond rings K. 10 diamond rings
D. 3 diamond rings H. 7 diamond rings
4. [5 points] Assume the price of a diamond ring is $3,000. Calculate the Consumer Surplus based on your answer from
question 3. Please show your work to ensure you can earn partial credit.
There are two ways of calculating this. In both cases, you would need to identify the area that represents consumer
surplus on the graph.
1. Recognizing this as is a series of columns, you would then calculate the area of the columns.
a. 1 unit * ($10,500 - $3,000) = $7,500
b. 3 units * ($9,000 - $3,000) = $18,000
c. 1 unit * ($7,500 - $3,000) = $4,500
d. 2 units * ($6,000 - $3,000) = $6,000
e. 1 unit * ($4,500 - $3,000) = $1,500
f. 1 unit * ($3,000 - $3,000) = $0
g. Consumer Surplus = $7,500 + $18,000 + $4,500 + $6,000 + $1,500 = $37,500
2. Recognizing that each grid box on the graph is $1,500, you simply count up all the grid boxes included in
the Consumer Surplus Area: 25 boxes.
a. 25 boxes * $1,500 per box = $37,500.
Page 2 of 6
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Wiseman. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $15.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
67163 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now