Question 1

-The figure above shows the market for pants.If 6 million pairs of pants are produced the deadweight loss is

Accepted Answer

A)  zero. 
B)  the triangle ABE. 
C)  the triangle BCE. 
D)  the triangle ACE. 
E)  the triangle BCE minus the triangle ABE. 
A)  zero. 
B)  the triangle ABE. 
C)  the triangle BCE. 
D)  the triangle ACE. 
E)  the triangle BCE minus the triangle ABE.

Question 2

-Suppose a factory can be designed to produce either trucks or cars.The figure above shows the marginal cost and marginal benefit of producing trucks in terms of the forgone cars.
a.What is the marginal benefit of the 25th truck?
b.What is the marginal cost of the 25th truck?
c.Should the 25th truck be produced? Why or why not.
d.What is the marginal benefit of the 75th truck?
e.What is the marginal cost of the 75th truck?
f.Should the 75th truck be produced? Why or why not?
g.What is the allocatively efficient quantity of trucks?

Accepted Answer

a.3 cars
b.1 car
c.This truck should be

Question 3

-In the above figure,if the market quantity is restricted to 500,000 and the price is allowed to rise to set the quantity demanded equal to the quantity supplied,then the producer surplus is equal to

Accepted Answer

A)  area D + area F. 
B)  area C + area E. 
C)  area A + area B + area C. 
D)  area A + area B. 
E)  area B + area D + area F. 
A)  area D + area F. 
B)  area C + area E. 
C)  area A + area B + area C. 
D)  area A + area B. 
E)  area B + area D + area F.

Question 4

Shelby said to her friend,"I just bought a new pair of climbing shoes and I love them so much that I totally would have paid more for them." Shelby was describing the concept of

Accepted Answer

A)  consumer surplus. 
B)  producer surplus. 
C)  equilibrium. 
D)  marginal cost. 
E)  total surplus. 
A)  consumer surplus. 
B)  producer surplus. 
C)  equilibrium. 
D)  marginal cost. 
E)  total surplus.

Question 5

The value of a slice of pizza to a consumer is equal to

Accepted Answer

A)  its marginal benefit. 
B)  the maximum price the consumer is willing to pay. 
C)  the consumer surplus. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct. 
A)  its marginal benefit. 
B)  the maximum price the consumer is willing to pay. 
C)  the consumer surplus. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct.

Question 6

Which of the following is true?
i.Marginal cost is measured by the maximum price that consumers are willing to pay for another unit of a good or service.
ii.Producer surplus equals marginal benefit minus price,summed over the quantity produced.
iii.A supply curve is a marginal cost curve.

Accepted Answer

A)  Only iii 
B)  Only i 
C)  Only ii 
D)  i and ii 
E)  i and iii 
A)  Only iii 
B)  Only i 
C)  Only ii 
D)  i and ii 
E)  i and iii

Question 7

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.At 1 manatee swim per week,Kaley's marginal benefit is ________ and Scott's marginal cost is ________.

Accepted Answer

A)  $40; $10 
B)  $40; $40 
C)  $90; $50 
D)  None of the above answers is correct. 
A)  $40; $10 
B)  $40; $40 
C)  $90; $50 
D)  None of the above answers is correct.

Question 8

What is the "big tradeoff"?

Accepted Answer

The "big tradeoff" is the tradeoff betwe

Question 9

The figure above shows the market for pizza.
-In the figure above,when the market is in equilibrium,marginal benefit ________ marginal cost,so the quantity of pizza produced is ________.

Accepted Answer

A)  equals; efficient 
B)  exceeds; efficient 
C)  is below; efficient 
D)  is below; not efficient 
E)  exceeds; not efficient 
A)  equals; efficient 
B)  exceeds; efficient 
C)  is below; efficient 
D)  is below; not efficient 
E)  exceeds; not efficient

Question 10

The chair of the Department of Economics at Colorado State University decided that office space is for tenured faculty and that graduate students are required to share cubicles.What method is used to allocate office space?

Accepted Answer

A)  lottery 
B)  majority rule 
C)  command 
D)  first-come, first-served 
E)  sharing equally 
A)  lottery 
B)  majority rule 
C)  command 
D)  first-come, first-served 
E)  sharing equally

Question 11

Which of the following is necessary for allocative efficiency to be achieved?

Accepted Answer

A)  Marginal benefit must be maximized. 
B)  Marginal cost must be minimized. 
C)  Marginal benefit must equal marginal cost. 
D)  The difference between marginal benefit and marginal cost must be maximized. 
E)  Production must be at a point inside the production possibilities frontier. 
A)  Marginal benefit must be maximized. 
B)  Marginal cost must be minimized. 
C)  Marginal benefit must equal marginal cost. 
D)  The difference between marginal benefit and marginal cost must be maximized. 
E)  Production must be at a point inside the production possibilities frontier.

Question 12

Which of the following is part of the cost of income transfers?

Accepted Answer

A)  Tax-collecting agencies cost money to administer. 
B)  Taxing incomes encourages people to work harder. 
C)  Income transfers make the results more unfair. 
D)  Income transfers increase the size of the economic pie. 
E)  Income transfers are a similar to allocating resources using a lottery. 
A)  Tax-collecting agencies cost money to administer. 
B)  Taxing incomes encourages people to work harder. 
C)  Income transfers make the results more unfair. 
D)  Income transfers increase the size of the economic pie. 
E)  Income transfers are a similar to allocating resources using a lottery.

Question 13

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 14

The producer surplus of making and selling 10 chairs is found by

Accepted Answer

A)  multiplying the selling price by 10. 
B)  subtracting the marginal cost from the selling price for each chair and summing the differences for all 10 chairs. 
C)  subtracting from the total revenue the cost of producing one chair multiplied by 10. 
D)  adding the marginal cost and the price of all 10 chairs. 
E)  None of the above answers is correct. 
A)  multiplying the selling price by 10. 
B)  subtracting the marginal cost from the selling price for each chair and summing the differences for all 10 chairs. 
C)  subtracting from the total revenue the cost of producing one chair multiplied by 10. 
D)  adding the marginal cost and the price of all 10 chairs. 
E)  None of the above answers is correct.

Question 15

-The figure above shows the supply and demand for pizza.
a.What is the efficient level of output?
b.If 70,000 pizzas are produced,what area represents the deadweight loss?
c.Why does the deadweight loss in part (b)occur?
d.If 20,000 pizzas are produced,what area represents the deadweight loss?
e.Why does the deadweight loss in part (d)occur?

Accepted Answer

a.40,000 pizzas is the efficient quantit

Question 16

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

Accepted Answer

The demand curve for a good tells us for

Question 17

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 18

Which of the following is most closely related to the "fair results" approach to fairness?

Accepted Answer

A)  efficient resource use 
B)  having an equal income distribution 
C)  voluntary exchange 
D)  the command system of allocating resources 
E)  price hikes in a natural disaster 
A)  efficient resource use 
B)  having an equal income distribution 
C)  voluntary exchange 
D)  the command system of allocating resources 
E)  price hikes in a natural disaster

Question 19

What are the two ways demand curves can be interpreted?

Accepted Answer

Demand curves can be used to find either

Question 20

Which of the following is a correct description of the supply curve?
i.The supply curve is also the marginal cost curve.
ii.The supply curve shows the dollars' worth of other goods that we must sacrifice to produce another unit of a good.
iii.The supply curve shows the additional cost of producing another unit of a good.

Accepted Answer

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

-The figure above shows the market for pants.If 6 million pairs of pants are produced the deadweight loss is

-In the above figure,if the market quantity is restricted to 500,000 and the price is allowed to rise to set the quantity demanded equal to the quantity supplied,then the producer surplus is equal to

Shelby said to her friend,"I just bought a new pair of climbing shoes and I love them so much that I totally would have paid more for them." Shelby was describing the concept of

The value of a slice of pizza to a consumer is equal to

Which of the following is true? i.Marginal cost is measured by the maximum price that consumers are willing to pay for another unit of a good or service. ii.Producer surplus equals marginal benefit minus price,summed over the quantity produced. iii.A supply curve is a marginal cost curve.

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.At 1 manatee swim per week,Kaley's marginal benefit is and Scott's marginal cost is .

What is the "big tradeoff"?

The figure above shows the market for pizza. -In the figure above,when the market is in equilibrium,marginal benefit marginal cost,so the quantity of pizza produced is .

The chair of the Department of Economics at Colorado State University decided that office space is for tenured faculty and that graduate students are required to share cubicles.What method is used to allocate office space?

Which of the following is necessary for allocative efficiency to be achieved?

Which of the following is part of the cost of income transfers?

Marginal benefit curves

The producer surplus of making and selling 10 chairs is found by

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

The marginal benefit from buying a particular unit of a good

Which of the following is most closely related to the "fair results" approach to fairness?

What are the two ways demand curves can be interpreted?

Getting Started

The Usand 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 figure above shows the market for pants.If 6 million pairs of pants are produced the deadweight loss is

-In the above figure,if the market quantity is restricted to 500,000 and the price is allowed to rise to set the quantity demanded equal to the quantity supplied,then the producer surplus is equal to

Shelby said to her friend,"I just bought a new pair of climbing shoes and I love them so much that I totally would have paid more for them." Shelby was describing the concept of

The value of a slice of pizza to a consumer is equal to

Which of the following is true? i.Marginal cost is measured by the maximum price that consumers are willing to pay for another unit of a good or service. ii.Producer surplus equals marginal benefit minus price,summed over the quantity produced. iii.A supply curve is a marginal cost curve.

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.At 1 manatee swim per week,Kaley's marginal benefit is ________ and Scott's marginal cost is ________.

What is the "big tradeoff"?

The figure above shows the market for pizza. -In the figure above,when the market is in equilibrium,marginal benefit ________ marginal cost,so the quantity of pizza produced is ________.

The chair of the Department of Economics at Colorado State University decided that office space is for tenured faculty and that graduate students are required to share cubicles.What method is used to allocate office space?

Which of the following is necessary for allocative efficiency to be achieved?

Which of the following is part of the cost of income transfers?

Marginal benefit curves

The producer surplus of making and selling 10 chairs is found by

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

The marginal benefit from buying a particular unit of a good

Which of the following is most closely related to the "fair results" approach to fairness?

What are the two ways demand curves can be interpreted?

Getting Started

The Usand 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

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.At 1 manatee swim per week,Kaley's marginal benefit is and Scott's marginal cost is .

The figure above shows the market for pizza. -In the figure above,when the market is in equilibrium,marginal benefit marginal cost,so the quantity of pizza produced is .