Question 1

The supply curve is upward sloping because of

Accepted Answer

A)  increasing marginal cost. 
B)  decreasing marginal benefit. 
C)  decreasing marginal cost. 
D)  increasing marginal benefit. 
E)  increasing total cost. 
A)  increasing marginal cost. 
B)  decreasing marginal benefit. 
C)  decreasing marginal cost. 
D)  increasing marginal benefit. 
E)  increasing total cost.

Question 2

The fair results approach to fairness

Accepted Answer

A)  requires property rights and voluntary exchange. 
B)  supports transferring income from the rich and giving it to the poor. 
C)  requires efficient market outcomes. 
D)  ensures that marginal cost equals marginal benefit. 
E)  never creates a big tradeoff. 
A)  requires property rights and voluntary exchange. 
B)  supports transferring income from the rich and giving it to the poor. 
C)  requires efficient market outcomes. 
D)  ensures that marginal cost equals marginal benefit. 
E)  never creates a big tradeoff.

Question 3

Briefly describe the concept of the "invisible hand."

Accepted Answer

The invisible hand suggests that a compe

Question 4

Which of the following is an example of consumer surplus?

Accepted Answer

A)  Jose buys a hamburger for $2 and tells you he would not have paid a penny more. 
B)  John believes the price he paid for his computer was too high. 
C)  Mary buys a paper tablet for $2 and finds the same good at another store for $1.50. 
D)  Sue would have paid $15 for a new compact disc but paid only $10. 
E)  Anne finds a mountain bike for which she is willing to pay a maximum of $550 and the price of the bike is $600. 
A)  Jose buys a hamburger for $2 and tells you he would not have paid a penny more. 
B)  John believes the price he paid for his computer was too high. 
C)  Mary buys a paper tablet for $2 and finds the same good at another store for $1.50. 
D)  Sue would have paid $15 for a new compact disc but paid only $10. 
E)  Anne finds a mountain bike for which she is willing to pay a maximum of $550 and the price of the bike is $600.

Question 5

Which of the following is an example in which "the big tradeoff" can occur?

Accepted Answer

A)  The government redistributes income from the rich to the poor. 
B)  Ford increases the price of a pickup truck. 
C)  A basketball player signs a $5 million contract. 
D)  A college lowers tuition. 
E)  The price of personal computers falls year after year. 
A)  The government redistributes income from the rich to the poor. 
B)  Ford increases the price of a pickup truck. 
C)  A basketball player signs a $5 million contract. 
D)  A college lowers tuition. 
E)  The price of personal computers falls year after year.

Question 6

At a competitive equilibrium,if there are no taxes,subsidies,price regulations,quantity regulations,or externalities,

Accepted Answer

A)  the marginal benefit is greater than the marginal cost. 
B)  resource use is efficient. 
C)  the marginal benefit is less than the marginal cost. 
D)  both the marginal benefit and the marginal cost of the last unit produced equal zero. 
E)  the marginal benefit is greater than the marginal cost by as much as possible. 
A)  the marginal benefit is greater than the marginal cost. 
B)  resource use is efficient. 
C)  the marginal benefit is less than the marginal cost. 
D)  both the marginal benefit and the marginal cost of the last unit produced equal zero. 
E)  the marginal benefit is greater than the marginal cost by as much as possible.

Question 7

The figure above shows the supply curve for pizza and the market price of pizza.
-In the figure above,the total revenue from pizza per day is

Accepted Answer

A)  $60,000. 
B)  $100,000. 
C)  $40,000. 
D)  $80,000. 
E)  $50,000. 
A)  $60,000. 
B)  $100,000. 
C)  $40,000. 
D)  $80,000. 
E)  $50,000.

Question 8

If the price of a pizza is $10 per pizza,the consumer surplus from the first pizza consumed ________ the consumer surplus from the second pizza consumed.

Accepted Answer

A)  is greater than 
B)  equals 
C)  is less than 
D)  cannot be compared to 
E)  None of the above answers is correct because more information is needed about the marginal cost of producing the pizzas to answer the question. 
A)  is greater than 
B)  equals 
C)  is less than 
D)  cannot be compared to 
E)  None of the above answers is correct because more information is needed about the marginal cost of producing the pizzas to answer the question.

Question 9

Seventy percent of Austin's chess club wanted to purchase new chess sets and thirty percent did not.The club purchased the sets.Which method of allocation best describes the choice to purchase the sets?

Accepted Answer

A)  force 
B)  sharing equally 
C)  command 
D)  majority rule 
E)  lottery 
A)  force 
B)  sharing equally 
C)  command 
D)  majority rule 
E)  lottery

Question 10

-In the figure above,suppose that $20 is the market equilibrium price.Which area is the consumer surplus?

Accepted Answer

A)  A 
B)  B 
C)  A + B 
D)  B - A 
E)  B ÷ A 
A)  A 
B)  B 
C)  A + B 
D)  B - A 
E)  B ÷ A

Question 11

The consumer acquires a consumer surplus on a good if the marginal benefit is

Accepted Answer

A)  equal to the price. 
B)  greater than the price. 
C)  less than the price. 
D)  zero. 
E)  less than the marginal cost. 
A)  equal to the price. 
B)  greater than the price. 
C)  less than the price. 
D)  zero. 
E)  less than the marginal cost.

Question 12

Obstacles in achieving efficiency in a market include

Accepted Answer

A)  public goods. 
B)  the presence of an external cost or benefit. 
C)  competition. 
D)  Both answers A and C are correct. 
E)  Both answers A and B are correct. 
A)  public goods. 
B)  the presence of an external cost or benefit. 
C)  competition. 
D)  Both answers A and C are correct. 
E)  Both answers A and B are correct.

Question 13

-The figure above represents the competitive market for slices of key lime pie.When the price is $3,the total consumer surplus equals

Accepted Answer

A)  $120. 
B)  $90. 
C)  $60. 
D)  $0. 
E)  None of the above answers is correct. 
A)  $120. 
B)  $90. 
C)  $60. 
D)  $0. 
E)  None of the above answers is correct.

Question 14

If marginal benefit is equal to marginal cost,then the

Accepted Answer

A)  producer surplus is equal to the consumer surplus. 
B)  sum of producer surplus and consumer surplus is as large as possible. 
C)  sum of producer surplus and consumer surplus equals zero. 
D)  market has squeezed out total surplus so that it equals zero. 
E)  deadweight loss is more than zero but less than its maximum. 
A)  producer surplus is equal to the consumer surplus. 
B)  sum of producer surplus and consumer surplus is as large as possible. 
C)  sum of producer surplus and consumer surplus equals zero. 
D)  market has squeezed out total surplus so that it equals zero. 
E)  deadweight loss is more than zero but less than its maximum.

Question 15

If society can produce more of one good but must forgo some of another good to do so,it is definitely achieving

Accepted Answer

A)  both production and allocative efficiency. 
B)  only production efficiency. 
C)  only allocative efficiency. 
D)  neither production nor allocative efficiency. 
E)  None of the above answers is correct because when society must forgo another good to produce more of one good, then society might be production efficient or it might be allocatively efficient. 
A)  both production and allocative efficiency. 
B)  only production efficiency. 
C)  only allocative efficiency. 
D)  neither production nor allocative efficiency. 
E)  None of the above answers is correct because when society must forgo another good to produce more of one good, then society might be production efficient or it might be allocatively efficient.

Question 16

When the marginal benefit and marginal cost of sodas are equal,then

Accepted Answer

A)  the production of sodas might be allocatively efficient but it is definitely production inefficient. 
B)  the allocatively inefficient amount of sodas is being produced. 
C)  more sodas should be produced to reach the allocatively efficient quantity. 
D)  fewer sodas should be produced to reach the allocatively efficient quantity. 
E)  the allocatively efficient amount of sodas is being produced. 
A)  the production of sodas might be allocatively efficient but it is definitely production inefficient. 
B)  the allocatively inefficient amount of sodas is being produced. 
C)  more sodas should be produced to reach the allocatively efficient quantity. 
D)  fewer sodas should be produced to reach the allocatively efficient quantity. 
E)  the allocatively efficient amount of sodas is being produced.

Question 17

What are the two ways demand curves can be interpreted?

Accepted Answer

Demand cur

Question 18

Which of the following occurs when a market is efficient?

Accepted Answer

A)  Consumer surplus equals producer surplus. 
B)  Consumer surplus is as large as possible. 
C)  Producer surplus is as large as possible. 
D)  The sum of consumer surplus and producer surplus is maximized. 
E)  The marginal benefit exceeds the marginal cost by as much as possible. 
A)  Consumer surplus equals producer surplus. 
B)  Consumer surplus is as large as possible. 
C)  Producer surplus is as large as possible. 
D)  The sum of consumer surplus and producer surplus is maximized. 
E)  The marginal benefit exceeds the marginal cost by as much as possible.

Question 19

When efficiency is attained,the consumer surplus

Accepted Answer

A)  must be larger than the producer surplus. 
B)  must be smaller than the producer surplus. 
C)  must equal the producer surplus. 
D)  can be either smaller than or larger than but cannot equal the producer surplus. 
E)  can be smaller than, equal to, or larger than the producer surplus. 
A)  must be larger than the producer surplus. 
B)  must be smaller than the producer surplus. 
C)  must equal the producer surplus. 
D)  can be either smaller than or larger than but cannot equal the producer surplus. 
E)  can be smaller than, equal to, or larger than the producer surplus.

Question 20

The resource allocation method used for the online auctions on eBay is

Accepted Answer

A)  market price. 
B)  lottery. 
C)  contest. 
D)  first-come, first-served. 
E)  sharing equally. 
A)  market price. 
B)  lottery. 
C)  contest. 
D)  first-come, first-served. 
E)  sharing equally.

The supply curve is upward sloping because of

The fair results approach to fairness

Briefly describe the concept of the "invisible hand."

Which of the following is an example of consumer surplus?

Which of the following is an example in which "the big tradeoff" can occur?

At a competitive equilibrium,if there are no taxes,subsidies,price regulations,quantity regulations,or externalities,

The figure above shows the supply curve for pizza and the market price of pizza. -In the figure above,the total revenue from pizza per day is

If the price of a pizza is $10 per pizza,the consumer surplus from the first pizza consumed ________ the consumer surplus from the second pizza consumed.

Seventy percent of Austin's chess club wanted to purchase new chess sets and thirty percent did not.The club purchased the sets.Which method of allocation best describes the choice to purchase the sets?

-In the figure above,suppose that $20 is the market equilibrium price.Which area is the consumer surplus?

The consumer acquires a consumer surplus on a good if the marginal benefit is

Obstacles in achieving efficiency in a market include

-The figure above represents the competitive market for slices of key lime pie.When the price is $3,the total consumer surplus equals

If marginal benefit is equal to marginal cost,then the

If society can produce more of one good but must forgo some of another good to do so,it is definitely achieving

When the marginal benefit and marginal cost of sodas are equal,then

What are the two ways demand curves can be interpreted?

Which of the following occurs when a market is efficient?

When efficiency is attained,the consumer surplus

The resource allocation method used for the online auctions on eBay is

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

The supply curve is upward sloping because of

The fair results approach to fairness

Briefly describe the concept of the "invisible hand."

Which of the following is an example of consumer surplus?

Which of the following is an example in which "the big tradeoff" can occur?

At a competitive equilibrium,if there are no taxes,subsidies,price regulations,quantity regulations,or externalities,

The figure above shows the supply curve for pizza and the market price of pizza. -In the figure above,the total revenue from pizza per day is

If the price of a pizza is $10 per pizza,the consumer surplus from the first pizza consumed ________ the consumer surplus from the second pizza consumed.

Seventy percent of Austin's chess club wanted to purchase new chess sets and thirty percent did not.The club purchased the sets.Which method of allocation best describes the choice to purchase the sets?

-In the figure above,suppose that $20 is the market equilibrium price.Which area is the consumer surplus?

The consumer acquires a consumer surplus on a good if the marginal benefit is

Obstacles in achieving efficiency in a market include

-The figure above represents the competitive market for slices of key lime pie.When the price is $3,the total consumer surplus equals

If marginal benefit is equal to marginal cost,then the

If society can produce more of one good but must forgo some of another good to do so,it is definitely achieving

When the marginal benefit and marginal cost of sodas are equal,then

What are the two ways demand curves can be interpreted?

Which of the following occurs when a market is efficient?

When efficiency is attained,the consumer surplus

The resource allocation method used for the online auctions on eBay is

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