Question 1

When the market price rises,the consumers' consumer surplus ________.When the market price falls,the consumers' consumer surplus ________.

Accepted Answer

A)  decreases; increases 
B)  decreases; decreases 
C)  increases; increases 
D)  increases; decreases 
E)  does not change; increases 
A)  decreases; increases 
B)  decreases; decreases 
C)  increases; increases 
D)  increases; decreases 
E)  does not change; increases

Question 2

-In the figure above,the equilibrium market price is $20.The producer surplus is shown by the area

Accepted Answer

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

Question 3

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.For Kaley and Scott,allocative efficiency is achieved at what point?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
E)  Either point A or point D 
A)  A 
B)  B 
C)  C 
D)  D 
E)  Either point A or point D

Question 4

Marginal benefit curves

Accepted Answer

A)  have positive slopes. 
B)  have negative slopes. 
C)  are horizontal lines. 
D)  are vertical lines. 
E)  are upside-down U-shaped curves. 
A)  have positive slopes. 
B)  have negative slopes. 
C)  are horizontal lines. 
D)  are vertical lines. 
E)  are upside-down U-shaped curves.

Question 5

The maximum amount of other goods and services that people are willing to give up in order to get one more unit of a good is defined as the good's

Accepted Answer

A)  marginal benefit. 
B)  total benefit. 
C)  marginal cost. 
D)  total cost. 
E)  price. 
A)  marginal benefit. 
B)  total benefit. 
C)  marginal cost. 
D)  total cost. 
E)  price.

Question 6

Jason hires Maria to tutor him in economics.Jason is willing to pay $30 for the first hour of tutoring,$25 for the second,$20 for the third,$15 for the fourth,and $10 for the fifth.Maria has an opportunity cost per hour of $6 for the first,$9 for the second,$12 for the third,$15 for the fourth,and $18 for the fifth.What will be the equilibrium quantity of hours tutored and the equilibrium price? Explain why this quantity and price is the equilibrium.What is Jason's consumer surplus and what is Maria's producer surplus?

Accepted Answer

The equilibrium quantity will be 4 hours

Question 7

A demand curve can be interpreted as

Accepted Answer

A)  a marginal benefit curve. 
B)  a total benefit curve. 
C)  an average benefit curve. 
D)  a marginal cost curve. 
E)  None of the above answers is correct. 
A)  a marginal benefit curve. 
B)  a total benefit curve. 
C)  an average benefit curve. 
D)  a marginal cost curve. 
E)  None of the above answers is correct.

Question 8

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

Accepted Answer

A)  marginal cost of 150th unit. 
B)  willingness to pay for the 1st unit. 
C)  producer surplus. 
D)  consumer surplus. 
E)  deadweight loss. 
A)  marginal cost of 150th unit. 
B)  willingness to pay for the 1st unit. 
C)  producer surplus. 
D)  consumer 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)  marginal cost exceeds marginal benefit. 
B)  a deadweight loss does not occur because everyone who wants to buy a broom can. 
C)  the "big tradeoff" occurs. 
D)  value exceeds price. 
E)  the "fair results" approach to fairness is definitely not violated. 
A)  marginal cost exceeds marginal benefit. 
B)  a deadweight loss does not occur because everyone who wants to buy a broom can. 
C)  the "big tradeoff" occurs. 
D)  value exceeds price. 
E)  the "fair results" approach to fairness is definitely not violated.

Question 10

Jason needs help getting ready for the next test in his economics course and would like to hire Maria,an economics tutor to help him.Jason is willing to pay $30 for the first hour of tutoring,$25 for the second,$20 for the third,$15 for the fourth,and $10 for the fifth.The equilibrium price for tutoring is $15 per hour.For how many hours of tutoring will Jason hire Maria? Why this amount of hours? What is Jason's consumer surplus,if any,from the tutoring? What is Maria's consumer surplus from the tutoring?

Accepted Answer

Jason will hire Maria for 4 hours of tut

Question 11

In the summer of 2008,the price of gasoline increased greatly.If the demand curve for gasoline did not shift,which of the following occurred?

Accepted Answer

A)  Drivers received no consumer surplus after the price increase. 
B)  Consumer surplus increased if drivers drove less. 
C)  Consumer surplus decreased. 
D)  If consumers drove the same amount, they received less total benefit. 
E)  Both the marginal benefit from each gallon of gasoline and the consumer surplus from each gallon of gasoline decreased. 
A)  Drivers received no consumer surplus after the price increase. 
B)  Consumer surplus increased if drivers drove less. 
C)  Consumer surplus decreased. 
D)  If consumers drove the same amount, they received less total benefit. 
E)  Both the marginal benefit from each gallon of gasoline and the consumer surplus from each gallon of gasoline decreased.

Question 12

$\begin{array}{c}
\begin{array}{c}
 \text {Quantity }\
 \text {(millions of}\ 
 \text {bushels of apples)}\
\hline5 \
10 \
15 \
20 \
25
\end{array}
\begin{array}{c}
\
 \text {Marginal benefit}\
 \text {(oranges per bushel)}\
\hline10\
8\
6\
4\
2
\end{array}
\begin{array}{c}
\
 \text {Marginal cost}\
 \text {(oranges per bushel)}\
\hline1\
3\
6\
9\
12
\end{array}
\end{array}$

-Using the values for the marginal benefit and the marginal cost of a bushel of apples given in the table above,what is the allocatively efficient quantity of apples? Suppose 10 million bushels of apples are produced.Should the quantity be increased or decreased? What if 20 million bushels are produced; should the quantity be increased or decreased?

Accepted Answer

The allocatively efficient quantity of a

Question 13

In a competitive market with no externalities,

Accepted Answer

A)  the consumer surplus is equal to zero because of competition. 
B)  buyers cannot control the price, so the consumer surplus is zero. 
C)  at the equilibrium price, marginal benefit exceeds marginal cost. 
D)  at the equilibrium price, marginal benefit equals marginal cost. 
E)  at the equilibrium price, the total amount of consumer surplus equals the total amount of producer surplus. 
A)  the consumer surplus is equal to zero because of competition. 
B)  buyers cannot control the price, so the consumer surplus is zero. 
C)  at the equilibrium price, marginal benefit exceeds marginal cost. 
D)  at the equilibrium price, marginal benefit equals marginal cost. 
E)  at the equilibrium price, the total amount of consumer surplus equals the total amount of producer surplus.

Question 14

Efficiency in a market occurs when the production of the good is such that

Accepted Answer

A)  marginal benefit exceeds marginal cost. 
B)  marginal benefit equals marginal cost. 
C)  marginal benefit is lower than marginal cost. 
D)  the marginal cost stops increasing. 
E)  marginal benefit exceeds marginal cost by the maximum amount possible. 
A)  marginal benefit exceeds marginal cost. 
B)  marginal benefit equals marginal cost. 
C)  marginal benefit is lower than marginal cost. 
D)  the marginal cost stops increasing. 
E)  marginal benefit exceeds marginal cost by the maximum amount possible.

Question 15

In 2009,tickets to a Presidential Town Hall meeting were distributed to individuals through a random selection of those who registered on a website.The tickets were allocated by which method?

Accepted Answer

A)  lottery 
B)  majority rule 
C)  contest 
D)  first-come, first-served 
E)  personal characteristics 
A)  lottery 
B)  majority rule 
C)  contest 
D)  first-come, first-served 
E)  personal characteristics

Question 16

Producer surplus definitely exists when the

Accepted Answer

A)  price exceeds marginal benefit. 
B)  price exceeds marginal cost. 
C)  marginal cost exceeds the price. 
D)  marginal benefit exceeds the price. 
E)  marginal benefit exceeds the marginal cost. 
A)  price exceeds marginal benefit. 
B)  price exceeds marginal cost. 
C)  marginal cost exceeds the price. 
D)  marginal benefit exceeds the price. 
E)  marginal benefit exceeds the marginal cost.

Question 17

Which of the following occurs when a market is efficient?

Accepted Answer

A)  Producers earn the highest income possible. 
B)  Production costs equal total benefit. 
C)  Consumer surplus equals producer surplus. 
D)  Scarce resources are used to produce the goods and services that people value most highly. 
E)  Every consumer has all of the good or service he or she wants. 
A)  Producers earn the highest income possible. 
B)  Production costs equal total benefit. 
C)  Consumer surplus equals producer surplus. 
D)  Scarce resources are used to produce the goods and services that people value most highly. 
E)  Every consumer has all of the good or service he or she wants.

Question 18

6.7 Integrative Questions
  
-The figure above shows the market for brooms.If the market is efficient,

Accepted Answer

A)  0 brooms are produced. 
B)  600 brooms are produced. 
C)  more than 1000 brooms are produced. 
D)  between 0 and 600 brooms are produced. 
E)  between 600 and 1000 brooms are produced. 
A)  0 brooms are produced. 
B)  600 brooms are produced. 
C)  more than 1000 brooms are produced. 
D)  between 0 and 600 brooms are produced. 
E)  between 600 and 1000 brooms are produced.

Question 19

"Allocative efficiency requires that the maximum number of people have access to all of the goods and services that our economy produces." Is this statement true or false? Explain your answer.

Accepted Answer

The statement is false.Allocative effici

Question 20

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The marginal cost of the 10,000th soda is

Accepted Answer

A)  $0.00. 
B)  $0.50. 
C)  $1.00. 
D)  more than $0.50 and less than $1.00. 
E)  None of the above answers is correct. 
A)  $0.00. 
B)  $0.50. 
C)  $1.00. 
D)  more than $0.50 and less than $1.00. 
E)  None of the above answers is correct.

When the market price rises,the consumers' consumer surplus .When the market price falls,the consumers' consumer surplus .

-In the figure above,the equilibrium market price is $20.The producer surplus is shown by the area

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.For Kaley and Scott,allocative efficiency is achieved at what point?

Marginal benefit curves

The maximum amount of other goods and services that people are willing to give up in order to get one more unit of a good is defined as the good's

A demand curve can be interpreted as

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

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

In the summer of 2008,the price of gasoline increased greatly.If the demand curve for gasoline did not shift,which of the following occurred?

In a competitive market with no externalities,

Efficiency in a market occurs when the production of the good is such that

In 2009,tickets to a Presidential Town Hall meeting were distributed to individuals through a random selection of those who registered on a website.The tickets were allocated by which method?

Producer surplus definitely exists when the

Which of the following occurs when a market is efficient?

6.7 Integrative Questions -The figure above shows the market for brooms.If the market is efficient,

"Allocative efficiency requires that the maximum number of people have access to all of the goods and services that our economy produces." Is this statement true or false? Explain your answer.

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The marginal cost of the 10,000th soda 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

When the market price rises,the consumers' consumer surplus ________.When the market price falls,the consumers' consumer surplus ________.

-In the figure above,the equilibrium market price is $20.The producer surplus is shown by the area

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.For Kaley and Scott,allocative efficiency is achieved at what point?

Marginal benefit curves

The maximum amount of other goods and services that people are willing to give up in order to get one more unit of a good is defined as the good's

A demand curve can be interpreted as

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

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

In the summer of 2008,the price of gasoline increased greatly.If the demand curve for gasoline did not shift,which of the following occurred?

In a competitive market with no externalities,

Efficiency in a market occurs when the production of the good is such that

In 2009,tickets to a Presidential Town Hall meeting were distributed to individuals through a random selection of those who registered on a website.The tickets were allocated by which method?

Producer surplus definitely exists when the

Which of the following occurs when a market is efficient?

6.7 Integrative Questions -The figure above shows the market for brooms.If the market is efficient,

"Allocative efficiency requires that the maximum number of people have access to all of the goods and services that our economy produces." Is this statement true or false? Explain your answer.

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The marginal cost of the 10,000th soda 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

When the market price rises,the consumers' consumer surplus .When the market price falls,the consumers' consumer surplus .