Question 1

When the efficient quantity is produced

Accepted Answer

A) total consumer surplus is zero. 
B) total producer surplus is zero. 
C) consumer surplus exceeds producer surplus by the greatest possible amount. 
D) producer surplus exceeds consumer surplus by the greatest possible amount. 
E) the sum of consumer surplus and producer surplus is maximized. 
A) total consumer surplus is zero. 
B) total producer surplus is zero. 
C) consumer surplus exceeds producer surplus by the greatest possible amount. 
D) producer surplus exceeds consumer surplus by the greatest possible amount. 
E) the sum of consumer surplus and producer surplus is maximized.

Question 2

Use the figure below to answer the following questions.   Figure 5.3.2
-Refer to Figure 5.3.2.If the level of output is 100 units,the deadweight loss is area

Accepted Answer

A) BCF. 
B) ACG. 
C) DCE. 
D) ACH. 
E) HCG. 
A) BCF. 
B) ACG. 
C) DCE. 
D) ACH. 
E) HCG.

Question 3

A new car has a sticker price of $24,000.Fred decides that he will pay no more than $23,000 for this car.He bought the car for $21,000.Fred obtains a consumer surplus of

Accepted Answer

A) $23,000. 
B) $21,000. 
C) $3,000. 
D) $1,000. 
E) $2,000. 
A) $23,000. 
B) $21,000. 
C) $3,000. 
D) $1,000. 
E) $2,000.

Question 4

The marginal cost of producing an additional basket of tomatoes is $5.00.The consumer is willing to pay a maximum of $9.00 for an additional basket.A farmer sells a basket of tomatoes for $6.00 each.The farmer receives a producer surplus from selling an additional basket of tomatoes equal to

Accepted Answer

A) $1.00. 
B) $3.00. 
C) $4.00. 
D) $5.00. 
E) $9.00. 
A) $1.00. 
B) $3.00. 
C) $4.00. 
D) $5.00. 
E) $9.00.

Question 5

Consumer surplus

Accepted Answer

A) is low for inexpensive goods. 
B) is high for inexpensive goods. 
C) is low for expensive goods. 
D) is high for expensive goods. 
E) may be low or high for any type of good,expensive or inexpensive,depending on the characteristics of demand. 
A) is low for inexpensive goods. 
B) is high for inexpensive goods. 
C) is low for expensive goods. 
D) is high for expensive goods. 
E) may be low or high for any type of good,expensive or inexpensive,depending on the characteristics of demand.

Question 6

Use the figure below to answer the following questions.   Figure 5.3.1
-Refer to Figure 5.3.1.If the quantity produced is 100,

Accepted Answer

A) marginal social benefit exceeds marginal social cost. 
B) marginal social cost exceeds marginal social benefit. 
C) production is efficient. 
D) marginal social benefit is minimized. 
E) deadweight loss is zero. 
A) marginal social benefit exceeds marginal social cost. 
B) marginal social cost exceeds marginal social benefit. 
C) production is efficient. 
D) marginal social benefit is minimized. 
E) deadweight loss is zero.

Question 7

What is the consumer surplus for the market from the consumption of the 100th unit of a good?

Accepted Answer

A) the marginal social cost of the 100th unit 
B) the marginal social benefit from the 100th unit 
C) the opportunity cost of producing the 100th unit 
D) the marginal social benefit from the 100th unit minus the marginal social cost of the 100th unit 
E) the marginal social benefit from the 100th unit minus the price paid for the 100th unit 
A) the marginal social cost of the 100th unit 
B) the marginal social benefit from the 100th unit 
C) the opportunity cost of producing the 100th unit 
D) the marginal social benefit from the 100th unit minus the marginal social cost of the 100th unit 
E) the marginal social benefit from the 100th unit minus the price paid for the 100th unit

Question 8

Lotteries allocate resources to

Accepted Answer

A) those who work for the government. 
B) those who come up lucky in a gaming system. 
C) those who work for private firms. 
D) people who are employed by gaming corporations. 
E) those who are in command. 
A) those who work for the government. 
B) those who come up lucky in a gaming system. 
C) those who work for private firms. 
D) people who are employed by gaming corporations. 
E) those who are in command.

Question 9

Use the figure below to answer the following questions.   Figure 5.2.6
-Figure 5.2.6 shows the supply curve of DVD rentals for Morgan's Marvellous Movies.If Morgan's rents the fifth DVD at a price of $7,what is the producer surplus on that rental?

Accepted Answer

A) $28 
B) $3 
C) $7 
D) $6 
E) $1 
A) $28 
B) $3 
C) $7 
D) $6 
E) $1

Question 10

Use the figure below to answer the following questions.   Figure 5.2.2
-Consider the demand curve in Figure 5.2.2.What is the consumer surplus when the price is $11 a unit?

Accepted Answer

A) $49.00 
B) $28.00 
C) $77.00 
D) $63.00 
E) $24.50 
A) $49.00 
B) $28.00 
C) $77.00 
D) $63.00 
E) $24.50

Question 11

When a deadweight loss occurs in a market,we can be certain that

Accepted Answer

A) taxes have been imposed in the market. 
B) the market is a monopoly. 
C) there is underproduction in the market. 
D) the entire economy experiences a loss. 
E) there is overproduction in the market. 
A) taxes have been imposed in the market. 
B) the market is a monopoly. 
C) there is underproduction in the market. 
D) the entire economy experiences a loss. 
E) there is overproduction in the market.

Question 12

Use the figure below to answer the following questions.   Figure 5.3.2
-Refer to Figure 5.3.2.If the level of output is 200 units,the deadweight loss is area

Accepted Answer

A) BCF. 
B) ACG. 
C) DCE. 
D) ACH. 
E) HCG. 
A) BCF. 
B) ACG. 
C) DCE. 
D) ACH. 
E) HCG.

Question 13

If the owner of an apartment building rents only to married couples over the age of 30,the method of resource allocation is

Accepted Answer

A) majority rule. 
B) contest. 
C) personal characteristics. 
D) market price. 
E) force. 
A) majority rule. 
B) contest. 
C) personal characteristics. 
D) market price. 
E) force.

Question 14

Consider a downward-sloping demand curve.Consumer surplus is

Accepted Answer

A) the difference between the market price of the good and the cost of the good. 
B) greater on the last unit sold than on the first unit sold. 
C) greater on the first unit sold than on the last unit sold. 
D) equal to price multiplied by quantity sold. 
E) equal to the area below the demand curve. 
A) the difference between the market price of the good and the cost of the good. 
B) greater on the last unit sold than on the first unit sold. 
C) greater on the first unit sold than on the last unit sold. 
D) equal to price multiplied by quantity sold. 
E) equal to the area below the demand curve.

Question 15

Which of the following can lead to an inefficient outcome? I.Price regulations
II.Increasing marginal cost
III.Monopoly

Accepted Answer

A) I only 
B) II only 
C) I and III 
D) III only 
E) I,II,and III 
A) I only 
B) II only 
C) I and III 
D) III only 
E) I,II,and III

Question 16

Use the figure below to answer the following questions.   Figure 5.2.3
-Refer to Figure 5.2.3.If the price falls from P1 to P0,what area on the graph indicates the change in consumer surplus?

Accepted Answer

A) A 
B) A plus B 
C) A plus B plus C 
D) B plus C 
E) A plus B plus D 
A) A 
B) A plus B 
C) A plus B plus C 
D) B plus C 
E) A plus B plus D

Question 17

The maximum price a consumer is willing to pay for a good is the

Accepted Answer

A) consumer surplus. 
B) value of the good. 
C) opportunity cost of producing the good. 
D) minimum supply-price. 
E) marginal cost of the good. 
A) consumer surplus. 
B) value of the good. 
C) opportunity cost of producing the good. 
D) minimum supply-price. 
E) marginal cost of the good.

Question 18

Use the information below to answer the following questions.
Fact 5.3.1
Only 1 percent of the world supply of water is fit for human consumption.Some places have more water than they can use;some could use much more than they have.The 1 percent available would be sufficient if only it were in the right place.
-Refer to Fact 5.3.1.The major problem in achieving an efficient use of the world's water is

Accepted Answer

A) the lack of rain in some areas of the world. 
B) water is vital for life. 
C) to get it from the places where it is most abundant to the places in which it has the most valuable uses. 
D) markets in water are controlled by governments or private producers. 
E) the price of water is too low. 
A) the lack of rain in some areas of the world. 
B) water is vital for life. 
C) to get it from the places where it is most abundant to the places in which it has the most valuable uses. 
D) markets in water are controlled by governments or private producers. 
E) the price of water is too low.

Question 19

What method of resource allocation depends on willingness-to-pay and ability-to-pay?

Accepted Answer

A) command 
B) lottery 
C) market price 
D) first-come,first-served 
E) force 
A) command 
B) lottery 
C) market price 
D) first-come,first-served 
E) force

Question 20

Use the figure below to answer the following questions.   Figure 5.3.2
-Refer to Figure 5.3.2.If the level of output is 150 units,the consumer surplus is area

Accepted Answer

A) BCF. 
B) ACG. 
C) DCE. 
D) ACH. 
E) HCG. 
A) BCF. 
B) ACG. 
C) DCE. 
D) ACH. 
E) HCG.

When the efficient quantity is produced

Use the figure below to answer the following questions. Figure 5.3.2 -Refer to Figure 5.3.2.If the level of output is 100 units,the deadweight loss is area

A new car has a sticker price of $24,000.Fred decides that he will pay no more than $23,000 for this car.He bought the car for $21,000.Fred obtains a consumer surplus of

The marginal cost of producing an additional basket of tomatoes is $5.00.The consumer is willing to pay a maximum of $9.00 for an additional basket.A farmer sells a basket of tomatoes for $6.00 each.The farmer receives a producer surplus from selling an additional basket of tomatoes equal to

Consumer surplus

Use the figure below to answer the following questions. Figure 5.3.1 -Refer to Figure 5.3.1.If the quantity produced is 100,

What is the consumer surplus for the market from the consumption of the 100th unit of a good?

Lotteries allocate resources to

Use the figure below to answer the following questions. Figure 5.2.6 -Figure 5.2.6 shows the supply curve of DVD rentals for Morgan's Marvellous Movies.If Morgan's rents the fifth DVD at a price of $7,what is the producer surplus on that rental?

Use the figure below to answer the following questions. Figure 5.2.2 -Consider the demand curve in Figure 5.2.2.What is the consumer surplus when the price is $11 a unit?

When a deadweight loss occurs in a market,we can be certain that

Use the figure below to answer the following questions. Figure 5.3.2 -Refer to Figure 5.3.2.If the level of output is 200 units,the deadweight loss is area

If the owner of an apartment building rents only to married couples over the age of 30,the method of resource allocation is

Consider a downward-sloping demand curve.Consumer surplus is

Which of the following can lead to an inefficient outcome? I.Price regulations II.Increasing marginal cost III.Monopoly

Use the figure below to answer the following questions. Figure 5.2.3 -Refer to Figure 5.2.3.If the price falls from P₁ to P₀,what area on the graph indicates the change in consumer surplus?

The maximum price a consumer is willing to pay for a good is the

What method of resource allocation depends on willingness-to-pay and ability-to-pay?

Use the figure below to answer the following questions. Figure 5.3.2 -Refer to Figure 5.3.2.If the level of output is 150 units,the consumer surplus is area

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Exam 5: Efficiency and Equity

When the efficient quantity is produced

Use the figure below to answer the following questions. Figure 5.3.2 -Refer to Figure 5.3.2.If the level of output is 100 units,the deadweight loss is area

A new car has a sticker price of $24,000.Fred decides that he will pay no more than $23,000 for this car.He bought the car for $21,000.Fred obtains a consumer surplus of

The marginal cost of producing an additional basket of tomatoes is $5.00.The consumer is willing to pay a maximum of $9.00 for an additional basket.A farmer sells a basket of tomatoes for $6.00 each.The farmer receives a producer surplus from selling an additional basket of tomatoes equal to

Consumer surplus

Use the figure below to answer the following questions. Figure 5.3.1 -Refer to Figure 5.3.1.If the quantity produced is 100,

What is the consumer surplus for the market from the consumption of the 100th unit of a good?

Lotteries allocate resources to

Use the figure below to answer the following questions. Figure 5.2.6 -Figure 5.2.6 shows the supply curve of DVD rentals for Morgan's Marvellous Movies.If Morgan's rents the fifth DVD at a price of $7,what is the producer surplus on that rental?

Use the figure below to answer the following questions. Figure 5.2.2 -Consider the demand curve in Figure 5.2.2.What is the consumer surplus when the price is $11 a unit?

When a deadweight loss occurs in a market,we can be certain that

Use the figure below to answer the following questions. Figure 5.3.2 -Refer to Figure 5.3.2.If the level of output is 200 units,the deadweight loss is area

If the owner of an apartment building rents only to married couples over the age of 30,the method of resource allocation is

Consider a downward-sloping demand curve.Consumer surplus is

Which of the following can lead to an inefficient outcome? I.Price regulations II.Increasing marginal cost III.Monopoly

Use the figure below to answer the following questions. Figure 5.2.3 -Refer to Figure 5.2.3.If the price falls from P1 to P0,what area on the graph indicates the change in consumer surplus?

The maximum price a consumer is willing to pay for a good is the

What method of resource allocation depends on willingness-to-pay and ability-to-pay?

Use the figure below to answer the following questions. Figure 5.3.2 -Refer to Figure 5.3.2.If the level of output is 150 units,the consumer surplus is area

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Use the figure below to answer the following questions. Figure 5.2.3 -Refer to Figure 5.2.3.If the price falls from P₁ to P₀,what area on the graph indicates the change in consumer surplus?