Question 1

Suppose you're willing to tutor a student for $10 an hour.The student pays you $15 an hour.What is your producer surplus?

Accepted Answer

A)  $5 an hour 
B)  $10 an hour 
C)  $15 an hour 
D)  $25 an hour 
E)  More than $25 an hour 
A)  $5 an hour 
B)  $10 an hour 
C)  $15 an hour 
D)  $25 an hour 
E)  More than $25 an hour

Question 2

The idea that unequal incomes are unfair generally uses the ________ principle of fairness.

Accepted Answer

A)  big tradeoff 
B)  involuntary exchange 
C)  voluntary exchange 
D)  it's not fair if the result isn't fair 
E)  it's not fair if the rules aren't fair 
A)  big tradeoff 
B)  involuntary exchange 
C)  voluntary exchange 
D)  it's not fair if the result isn't fair 
E)  it's not fair if the rules aren't fair

Question 3

In a competitive market for a private good with no price or quantity regulations,no external cost nor external benefit,low transactions costs,and no taxes or subsidies,

Accepted Answer

A)  the allocation of resources is planned by the government. 
B)  production is organized by government organizations. 
C)  efficiency can be attained in the market with no government intervention. 
D)  efficiency is usually be achieved by majority rule. 
E)  efficiency is generally obtained by using a command system. 
A)  the allocation of resources is planned by the government. 
B)  production is organized by government organizations. 
C)  efficiency can be attained in the market with no government intervention. 
D)  efficiency is usually be achieved by majority rule. 
E)  efficiency is generally obtained by using a command system.

Question 4

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's total benefit from consuming 15 sodas is

Accepted Answer

A)  $15.00. 
B)  $26.25. 
C)  $11.25. 
D)  $0. 
E)  None of the above answers is correct. 
A)  $15.00. 
B)  $26.25. 
C)  $11.25. 
D)  $0. 
E)  None of the above answers is correct.

Question 5

The marginal benefit from buying a particular unit of a good

Accepted Answer

A)  is the amount paid for the unit plus the consumer surplus of the unit. 
B)  increases as market price increases. 
C)  is the difference between the amount paid for the unit and the market price of the unit. 
D)  is the difference between the total benefit of the unit and the marginal cost of producing that unit. 
E)  None of the above answers is correct. 
A)  is the amount paid for the unit plus the consumer surplus of the unit. 
B)  increases as market price increases. 
C)  is the difference between the amount paid for the unit and the market price of the unit. 
D)  is the difference between the total benefit of the unit and the marginal cost of producing that unit. 
E)  None of the above answers is correct.

Question 6

As more of a good is consumed,the marginal benefit of the good

Accepted Answer

A)  increases. 
B)  decreases. 
C)  remains constant. 
D)  is unpredictable. 
E)  first decreases and then increases. 
A)  increases. 
B)  decreases. 
C)  remains constant. 
D)  is unpredictable. 
E)  first decreases and then increases.

Question 7

If a landlord will rent an apartment only to married couples,the landlord is using a ________ allocation method.

Accepted Answer

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

Question 8

To determine how much of a good to produce to achieve allocative efficiency,we

Accepted Answer

A)  construct a production possibilities frontier and choose the midpoint. 
B)  construct a production possibilities frontier and choose any point on it. 
C)  must produce on the PPF and at the point where the marginal benefit and marginal cost of the good are equal. 
D)  must produce on the PPF and at the point where the marginal benefit exceeds by any amount the marginal cost of the good. 
E)  must produce on the PPF and at the point where the marginal benefit exceeds by as much as possible the marginal cost of the good. 
A)  construct a production possibilities frontier and choose the midpoint. 
B)  construct a production possibilities frontier and choose any point on it. 
C)  must produce on the PPF and at the point where the marginal benefit and marginal cost of the good are equal. 
D)  must produce on the PPF and at the point where the marginal benefit exceeds by any amount the marginal cost of the good. 
E)  must produce on the PPF and at the point where the marginal benefit exceeds by as much as possible the marginal cost of the good.

Question 9

Why is the demand curve the same as the marginal benefit curve?

Accepted Answer

The demand curve for a good tells us for

Question 10

When technology increases the supply of a good and lower prices increase the quantity demanded,

Accepted Answer

A)  the economy is reallocating resources to achieve an efficient allocation. 
B)  consumer surplus falls. 
C)  the invisible hand is unnecessary. 
D)  the marginal benefit of the good increases with the quantity produced. 
E)  the economy is no longer efficient because the quantity changes. 
A)  the economy is reallocating resources to achieve an efficient allocation. 
B)  consumer surplus falls. 
C)  the invisible hand is unnecessary. 
D)  the marginal benefit of the good increases with the quantity produced. 
E)  the economy is no longer efficient because the quantity changes.

Question 11

If the price of a visit to Sea World exceeds the marginal cost of the visit by $13,a producer surplus exists for Sea World." Is this statement true or false?

Accepted Answer

The statement is true.Anytime

Question 12

The supply curve is the same as another curve.What other curve is the same as the supply curve? Why are the curves the same?

Accepted Answer

The supply curve is the same as the marg

Question 13

The price of a shirt is $20.Charlie can produce a shirt at a marginal cost of $10,Mac can produce a shirt for $18,and Dennis can produce a shirt for $22.For a shirt,Deandra has a marginal benefit of $25,Frank has marginal benefit of $20,and Artemis has a marginal benefit of $18.Which of the following statements is correct?

Accepted Answer

A)  The sum of consumer surplus is $5 and the sum of producer surplus is $12. 
B)  The sum of consumer surplus is $12. 
C)  Only Frank and Artemis will purchase a shirt. 
D)  Only Dennis will produce a shirt. 
E)  The sum of producer surplus is $10. 
A)  The sum of consumer surplus is $5 and the sum of producer surplus is $12. 
B)  The sum of consumer surplus is $12. 
C)  Only Frank and Artemis will purchase a shirt. 
D)  Only Dennis will produce a shirt. 
E)  The sum of producer surplus is $10.

Question 14

Air pollution is an external cost because it

Accepted Answer

A)  is a pollution of the external environment. 
B)  is a cost not borne by the producer of the good. 
C)  benefits no one. 
D)  is not associated with resource use. 
E)  is created only when production occurs. 
A)  is a pollution of the external environment. 
B)  is a cost not borne by the producer of the good. 
C)  benefits no one. 
D)  is not associated with resource use. 
E)  is created only when production occurs.

Question 15

6.7 Integrative Questions
  
-The figure above shows the market for brooms.Which of the following could lead to the production of fewer than 600 brooms?

Accepted Answer

A)  a monopoly 
B)  a deadweight loss 
C)  subsidies 
D)  an external cost 
E)  a big tradeoff 
A)  a monopoly 
B)  a deadweight loss 
C)  subsidies 
D)  an external cost 
E)  a big tradeoff

Question 16

Efficiency occurs in a market when

Accepted Answer

A)  the sum of consumer surplus and producer surplus is maximized. 
B)  consumer surplus is equal to producer surplus. 
C)  consumer surplus is less than producer surplus. 
D)  consumer surplus is greater than producer surplus. 
E)  total revenue is maximized. 
A)  the sum of consumer surplus and producer surplus is maximized. 
B)  consumer surplus is equal to producer surplus. 
C)  consumer surplus is less than producer surplus. 
D)  consumer surplus is greater than producer surplus. 
E)  total revenue is maximized.

Question 17

-Which of the following leads to a deadweight loss?
i.competition
ii.taxes
iii.consumer surplus
iv.monopoly

Accepted Answer

A)  ii only 
B)  iii and iv 
C)  i and ii 
D)  ii and iv 
E)  i, ii, and iii 
A)  ii only 
B)  iii and iv 
C)  i and ii 
D)  ii and iv 
E)  i, ii, and iii

Question 18

What is producer surplus?

Accepted Answer

Producer surplus equals the di

Question 19

Marginal benefit is the

Accepted Answer

A)  total benefit we receive from consuming a good or service. 
B)  additional benefit we receive from consuming one more unit of a good or service. 
C)  minimum amount of other goods or services we are willing to give up. 
D)  opportunities given up to get one more unit of a good or service. 
E)  the benefit we receive from consuming one more unit of a good or service minus the cost of the producing one more unit of the good or service. 
A)  total benefit we receive from consuming a good or service. 
B)  additional benefit we receive from consuming one more unit of a good or service. 
C)  minimum amount of other goods or services we are willing to give up. 
D)  opportunities given up to get one more unit of a good or service. 
E)  the benefit we receive from consuming one more unit of a good or service minus the cost of the producing one more unit of the good or service.

Question 20

-The figure above shows the market for pants.If the government subsidizes the production of pants so that production expands from 6 million pairs to 7 million pairs,

Accepted Answer

A)  there would be no deadweight loss. 
B)  the government's policy would have no effect on the sum of consumer surplus and producer surplus. 
C)  a deadweight loss would result. 
D)  the government's policy would increase the sum of consumer surplus and producer surplus. 
E)  production would be even more efficient than if 6 million pairs of pants are produced because more is always better than less. 
A)  there would be no deadweight loss. 
B)  the government's policy would have no effect on the sum of consumer surplus and producer surplus. 
C)  a deadweight loss would result. 
D)  the government's policy would increase the sum of consumer surplus and producer surplus. 
E)  production would be even more efficient than if 6 million pairs of pants are produced because more is always better than less.

Suppose you're willing to tutor a student for $10 an hour.The student pays you $15 an hour.What is your producer surplus?

The idea that unequal incomes are unfair generally uses the ________ principle of fairness.

In a competitive market for a private good with no price or quantity regulations,no external cost nor external benefit,low transactions costs,and no taxes or subsidies,

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's total benefit from consuming 15 sodas is

The marginal benefit from buying a particular unit of a good

As more of a good is consumed,the marginal benefit of the good

If a landlord will rent an apartment only to married couples,the landlord is using a ________ allocation method.

To determine how much of a good to produce to achieve allocative efficiency,we

Why is the demand curve the same as the marginal benefit curve?

When technology increases the supply of a good and lower prices increase the quantity demanded,

If the price of a visit to Sea World exceeds the marginal cost of the visit by $13,a producer surplus exists for Sea World." Is this statement true or false?

The supply curve is the same as another curve.What other curve is the same as the supply curve? Why are the curves the same?

Air pollution is an external cost because it

6.7 Integrative Questions -The figure above shows the market for brooms.Which of the following could lead to the production of fewer than 600 brooms?

Efficiency occurs in a market when

-Which of the following leads to a deadweight loss? i.competition ii.taxes iii.consumer surplus iv.monopoly

What is producer surplus?

Marginal benefit is the

-The figure above shows the market for pants.If the government subsidizes the production of pants so that production expands from 6 million pairs to 7 million pairs,

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 6: Efficiency and Fairness of Markets

Suppose you're willing to tutor a student for $10 an hour.The student pays you $15 an hour.What is your producer surplus?

The idea that unequal incomes are unfair generally uses the ________ principle of fairness.

In a competitive market for a private good with no price or quantity regulations,no external cost nor external benefit,low transactions costs,and no taxes or subsidies,

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's total benefit from consuming 15 sodas is

The marginal benefit from buying a particular unit of a good

As more of a good is consumed,the marginal benefit of the good

If a landlord will rent an apartment only to married couples,the landlord is using a ________ allocation method.

To determine how much of a good to produce to achieve allocative efficiency,we

Why is the demand curve the same as the marginal benefit curve?

When technology increases the supply of a good and lower prices increase the quantity demanded,

If the price of a visit to Sea World exceeds the marginal cost of the visit by $13,a producer surplus exists for Sea World." Is this statement true or false?

The supply curve is the same as another curve.What other curve is the same as the supply curve? Why are the curves the same?

Air pollution is an external cost because it

6.7 Integrative Questions -The figure above shows the market for brooms.Which of the following could lead to the production of fewer than 600 brooms?

Efficiency occurs in a market when

-Which of the following leads to a deadweight loss? i.competition ii.taxes iii.consumer surplus iv.monopoly

What is producer surplus?

Marginal benefit is the

-The figure above shows the market for pants.If the government subsidizes the production of pants so that production expands from 6 million pairs to 7 million pairs,

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters