Question 1

"Peak pricing" involves setting lower prices at peak times so that people can afford a good or service.

Accepted Answer

A) True 
 B)False

Question 2

In a market system, the mechanism that coordinates economic activity is

Accepted Answer

A) the profit motive. 
B) the price system. 
C) input-output analysis. 
D) program trading in the stock market. 
A) the profit motive. 
B) the price system. 
C) input-output analysis. 
D) program trading in the stock market.

Question 3

Figure 11-2
​  
-In Figure 11-2, which of the points are efficient allocations of resources?

Accepted Answer

A) A, B, and C 
B) B and C only 
C) C and B and D 
D) B only 
A) A, B, and C 
B) B and C only 
C) C and B and D 
D) B only

Question 4

Which of the following is least likely to be an example of peak/off-peak pricing?

Accepted Answer

A) Breakfast cereals 
B) Hotels 
C) Toll roads 
D) Electricity 
A) Breakfast cereals 
B) Hotels 
C) Toll roads 
D) Electricity

Question 5

Efficient allocation of resources makes everyone better off.

Accepted Answer

A) True 
 B)False

Question 6

Efficiency in output requires which of the following?

Accepted Answer

A) MC = MRP 
B) MC = MFC 
C) MC = MU 
D) MC = AVC 
A) MC = MRP 
B) MC = MFC 
C) MC = MU 
D) MC = AVC

Question 7

Prices serve the public interest by

Accepted Answer

A) making resource owners wealthy. 
B) rationing scarce resources. 
C) keeping poor people from purchasing more than they can afford. 
D) forcing the government to participate in the market. 
A) making resource owners wealthy. 
B) rationing scarce resources. 
C) keeping poor people from purchasing more than they can afford. 
D) forcing the government to participate in the market.

Question 8

Explain why movie theaters charge more for evening performances than for matinees.

Accepted Answer

If prices were the same at all times, mo

Question 9

Central planners in command economies

Accepted Answer

A) generally set production targets for firms. 
B) always consult consumers on the output of goods they want to consume. 
C) allow prices to organize the economy's production. 
D) depend upon the invisible hand to coordinate economic activities. 
A) generally set production targets for firms. 
B) always consult consumers on the output of goods they want to consume. 
C) allow prices to organize the economy's production. 
D) depend upon the invisible hand to coordinate economic activities.

Question 10

Prices

Accepted Answer

A) solve the problem of distribution of products among consumers. 
B) act as rationing devices. 
C) under laissez-faire produce an efficient allocation of resources. 
D) do all of the things listed here. 
A) solve the problem of distribution of products among consumers. 
B) act as rationing devices. 
C) under laissez-faire produce an efficient allocation of resources. 
D) do all of the things listed here.

Question 11

If the MU of half gallon of milk is $3.50 and the MU of gallon of milk is $3.25, and they both sell for the same price, we would expect consumers to

Accepted Answer

A) increase their purchases of gallons of milk. 
B) increase their purchases of half gallons of milk. 
C) not change their purchasing habits. 
D) buy only gallons of milk. 
A) increase their purchases of gallons of milk. 
B) increase their purchases of half gallons of milk. 
C) not change their purchasing habits. 
D) buy only gallons of milk.

Exam 11: The Case for Free Markets: the Price System

"Peak pricing" involves setting lower prices at peak times so that people can afford a good or service.

In a market system, the mechanism that coordinates economic activity is

Figure 11-2 ​ -In Figure 11-2, which of the points are efficient allocations of resources?

Which of the following is least likely to be an example of peak/off-peak pricing?

Efficient allocation of resources makes everyone better off.

Efficiency in output requires which of the following?

Prices serve the public interest by

Explain why movie theaters charge more for evening performances than for matinees.

Central planners in command economies

Prices

If the MU of half gallon of milk is $3.50 and the MU of gallon of milk is $3.25, and they both sell for the same price, we would expect consumers to

What Is Economics

The Economony: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Useconomy

Filters

Figure 11-2 -In Figure 11-2, which of the points are efficient allocations of resources?