Question 1

Any point on the production possibility frontier is

Accepted Answer

A)  attainable and might be allocatively inefficient. 
B)  attainable and must be allocatively efficient. 
C)  less production efficient than a point in the interior of the PPF. 
D)  always allocatively efficient but might or might not be production efficient. 
E)  always production efficient and always allocatively efficient. 
A)  attainable and might be allocatively inefficient. 
B)  attainable and must be allocatively efficient. 
C)  less production efficient than a point in the interior of the PPF. 
D)  always allocatively efficient but might or might not be production efficient. 
E)  always production efficient and always allocatively efficient.

Question 2

-In the above figure,the market is at its equilibrium.Area B is equal to

Accepted Answer

A)  consumer surplus. 
B)  total revenue. 
C)  marginal benefit. 
D)  producer surplus. 
E)  total surplus. 
A)  consumer surplus. 
B)  total revenue. 
C)  marginal benefit. 
D)  producer surplus. 
E)  total surplus.

Question 3

Explain how the invisible hand delivers an efficient market outcome.

Accepted Answer

The invisible hand concepts claims that

Question 4

We allocate resources efficiently when

Accepted Answer

A)  marginal benefit is equal to marginal cost. 
B)  marginal benefit is greater than marginal cost by any amount. 
C)  marginal cost is greater than marginal benefit. 
D)  total benefit is greater than total cost. 
E)  marginal benefit is greater than marginal cost by as much as possible. 
A)  marginal benefit is equal to marginal cost. 
B)  marginal benefit is greater than marginal cost by any amount. 
C)  marginal cost is greater than marginal benefit. 
D)  total benefit is greater than total cost. 
E)  marginal benefit is greater than marginal cost by as much as possible.

Question 5

Allocative efficiency is achieved when the production is such that

Accepted Answer

A)  the marginal benefit exceeds the marginal cost by as much as possible. 
B)  marginal cost equals zero. 
C)  marginal benefit is equal to marginal cost. 
D)  the production point is on the PPF. 
E)  None of the above is true. 
A)  the marginal benefit exceeds the marginal cost by as much as possible. 
B)  marginal cost equals zero. 
C)  marginal benefit is equal to marginal cost. 
D)  the production point is on the PPF. 
E)  None of the above is true.

Question 6

Outcomes are fair according to the

Accepted Answer

A)  rules view if private property rights are established and trade is voluntary. 
B)  results view if private property rights are established and trade is voluntary. 
C)  rules view if there is not too much inequality. 
D)  results view if there is not a big tradeoff. 
E)  results view if there is equality of opportunity. 
A)  rules view if private property rights are established and trade is voluntary. 
B)  results view if private property rights are established and trade is voluntary. 
C)  rules view if there is not too much inequality. 
D)  results view if there is not a big tradeoff. 
E)  results view if there is equality of opportunity.

Question 7

A point on the supply curve can illustrate the

Accepted Answer

A)  price and the corresponding quantity supplied. 
B)  marginal cost of that unit of the good. 
C)  price the consumer is willing to pay. 
D)  Both answers A and B are correct. 
E)  Both answers A and C are correct. 
A)  price and the corresponding quantity supplied. 
B)  marginal cost of that unit of the good. 
C)  price the consumer is willing to pay. 
D)  Both answers A and B are correct. 
E)  Both answers A and C are correct.

Question 8

-In the figure above,suppose the market is at equilibrium.Then area A is the

Accepted Answer

A)  marginal benefit. 
B)  marginal cost. 
C)  amount of the consumer surplus. 
D)  amount of the producer surplus. 
E)  deadweight loss. 
A)  marginal benefit. 
B)  marginal cost. 
C)  amount of the consumer surplus. 
D)  amount of the producer surplus. 
E)  deadweight loss.

Question 9

6.7 Integrative Questions
  
-The figure above shows the market for brooms.If 800 brooms are produced,

Accepted Answer

A)  consumer surplus is maximized. 
B)  producer surplus is maximized. 
C)  market failure and a deadweight loss occur. 
D)  marginal cost is less than marginal benefit. 
E)  there is no deadweight loss. 
A)  consumer surplus is maximized. 
B)  producer surplus is maximized. 
C)  market failure and a deadweight loss occur. 
D)  marginal cost is less than marginal benefit. 
E)  there is no deadweight loss.

Question 10

The figure above shows the market for pizza.
-In the figure above,if pizza production increases to 15,000 pizzas a day,the deadweight loss is

Accepted Answer

A)  $45,000 per day. 
B)  $12,500 per day. 
C)  $22,500 per day. 
D)  $90,000 per day. 
E)  zero. 
A)  $45,000 per day. 
B)  $12,500 per day. 
C)  $22,500 per day. 
D)  $90,000 per day. 
E)  zero.

Question 11

-The figure above shows the supply and demand curves for pizza.If the market is at its competitive equilibrium,what area in the graph above represents:
a.consumer surplus?
b.producer surplus?

Accepted Answer

The answer of  
-The figure above shows the supply...

Question 12

The demand curve is also the

Accepted Answer

A)  total cost curve. 
B)  total benefit curve. 
C)  marginal cost curve. 
D)  marginal benefit curve. 
E)  marginal deadweight cost curve. 
A)  total cost curve. 
B)  total benefit curve. 
C)  marginal cost curve. 
D)  marginal benefit curve. 
E)  marginal deadweight cost curve.

Question 13

Cost

Accepted Answer

A)  is what the buyer pays to get the good. 
B)  is always equal to the marginal benefit for every unit of a good produced. 
C)  is what the seller must give up to produce the good. 
D)  is greater than market price, which results in a profit for firms. 
E)  means the same thing as price. 
A)  is what the buyer pays to get the good. 
B)  is always equal to the marginal benefit for every unit of a good produced. 
C)  is what the seller must give up to produce the good. 
D)  is greater than market price, which results in a profit for firms. 
E)  means the same thing as price.

Question 14

The phrase "decreasing marginal benefit" means that

Accepted Answer

A)  the more you consume of the product, the less total benefit you derive. 
B)  the marginal cost will be increasing as you consume more of a good. 
C)  each additional unit of a good you consume gives you less additional benefit than the previous unit. 
D)  Both answers A and B are correct. 
E)  Both answers A and C are correct. 
A)  the more you consume of the product, the less total benefit you derive. 
B)  the marginal cost will be increasing as you consume more of a good. 
C)  each additional unit of a good you consume gives you less additional benefit than the previous unit. 
D)  Both answers A and B are correct. 
E)  Both answers A and C are correct.

Question 15

-In the figure above,the equilibrium market price is $20.Area A is the

Accepted Answer

A)  marginal cost of 150th unit. 
B)  willingness to pay for the 150th unit. 
C)  producer surplus. 
D)  consumer surplus. 
E)  marginal benefit of 150th unit. 
A)  marginal cost of 150th unit. 
B)  willingness to pay for the 150th unit. 
C)  producer surplus. 
D)  consumer surplus. 
E)  marginal benefit of 150th unit.

Question 16

"Allocative efficiency in the production of cherries means that consumers can eat all of the cherries they desire." Is this statement true or false?

Accepted Answer

Allocative efficiency means that we are

Question 17

When society produces the combination of goods and services on the PPF that it values the most highly,society has

Accepted Answer

A)  achieved only production efficiency and definitely not allocative efficiency. 
B)  achieved only allocative efficiency definitely not production efficiency. 
C)  achieved both production efficiency and allocative efficiency. 
D)  achieved a free lunch. 
E)  perhaps achieved production efficiency and has perhaps achieved allocative efficiency. 
A)  achieved only production efficiency and definitely not allocative efficiency. 
B)  achieved only allocative efficiency definitely not production efficiency. 
C)  achieved both production efficiency and allocative efficiency. 
D)  achieved a free lunch. 
E)  perhaps achieved production efficiency and has perhaps achieved allocative efficiency.

Question 18

Suppose the nation is producing at a point on its PPF.If the marginal cost of producing one more computer is greater than the marginal benefit,the nation is producing

Accepted Answer

A)  too few computers to be allocatively efficient. 
B)  too many computers to be allocatively efficient. 
C)  the correct number of computers to be allocatively efficient. 
D)  at the point of allocative efficiency. 
E)  More information is needed to determine if the nation is or is not producing at the allocatively efficient point. 
A)  too few computers to be allocatively efficient. 
B)  too many computers to be allocatively efficient. 
C)  the correct number of computers to be allocatively efficient. 
D)  at the point of allocative efficiency. 
E)  More information is needed to determine if the nation is or is not producing at the allocatively efficient point.

Question 19

The marginal benefit of a taco is measured by

Accepted Answer

A)  the price of the taco. 
B)  the amount of another good a person is willing to give up to get one more taco. 
C)  the amount of another good a person must give up to get one more taco. 
D)  a point on the PPF. 
E)  the opportunity cost of producing another taco. 
A)  the price of the taco. 
B)  the amount of another good a person is willing to give up to get one more taco. 
C)  the amount of another good a person must give up to get one more taco. 
D)  a point on the PPF. 
E)  the opportunity cost of producing another taco.

Question 20

When output is less than the efficient level,

Accepted Answer

A)  consumers are willing to pay more for another unit than it costs to produce the unit. 
B)  the amount consumers are willing to pay equals the cost of production. 
C)  the cost of production is greater than the price consumers are willing to pay. 
D)  the production costs can't be measured. 
E)  the marginal cost of producing the good must be greater than the marginal benefit from the good. 
A)  consumers are willing to pay more for another unit than it costs to produce the unit. 
B)  the amount consumers are willing to pay equals the cost of production. 
C)  the cost of production is greater than the price consumers are willing to pay. 
D)  the production costs can't be measured. 
E)  the marginal cost of producing the good must be greater than the marginal benefit from the good.

Any point on the production possibility frontier is

-In the above figure,the market is at its equilibrium.Area B is equal to

Explain how the invisible hand delivers an efficient market outcome.

We allocate resources efficiently when

Allocative efficiency is achieved when the production is such that

Outcomes are fair according to the

A point on the supply curve can illustrate the

-In the figure above,suppose the market is at equilibrium.Then area A is the

6.7 Integrative Questions -The figure above shows the market for brooms.If 800 brooms are produced,

The figure above shows the market for pizza. -In the figure above,if pizza production increases to 15,000 pizzas a day,the deadweight loss is

-The figure above shows the supply and demand curves for pizza.If the market is at its competitive equilibrium,what area in the graph above represents: a.consumer surplus? b.producer surplus?

The demand curve is also the

Cost

The phrase "decreasing marginal benefit" means that

-In the figure above,the equilibrium market price is $20.Area A is the

"Allocative efficiency in the production of cherries means that consumers can eat all of the cherries they desire." Is this statement true or false?

When society produces the combination of goods and services on the PPF that it values the most highly,society has

Suppose the nation is producing at a point on its PPF.If the marginal cost of producing one more computer is greater than the marginal benefit,the nation is producing

The marginal benefit of a taco is measured by

When output is less than the efficient level,

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

Any point on the production possibility frontier is

-In the above figure,the market is at its equilibrium.Area B is equal to

Explain how the invisible hand delivers an efficient market outcome.

We allocate resources efficiently when

Allocative efficiency is achieved when the production is such that

Outcomes are fair according to the

A point on the supply curve can illustrate the

-In the figure above,suppose the market is at equilibrium.Then area A is the

6.7 Integrative Questions -The figure above shows the market for brooms.If 800 brooms are produced,

The figure above shows the market for pizza. -In the figure above,if pizza production increases to 15,000 pizzas a day,the deadweight loss is

-The figure above shows the supply and demand curves for pizza.If the market is at its competitive equilibrium,what area in the graph above represents: a.consumer surplus? b.producer surplus?

The demand curve is also the

Cost

The phrase "decreasing marginal benefit" means that

-In the figure above,the equilibrium market price is $20.Area A is the

"Allocative efficiency in the production of cherries means that consumers can eat all of the cherries they desire." Is this statement true or false?

When society produces the combination of goods and services on the PPF that it values the most highly,society has

Suppose the nation is producing at a point on its PPF.If the marginal cost of producing one more computer is greater than the marginal benefit,the nation is producing

The marginal benefit of a taco is measured by

When output is less than the efficient level,

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