Question 1

Why does redistribution,so that the distribution of income is equal,bring about less total output?

Accepted Answer

A)  Incentives to work are reduced. 
B)  No one can determine marginal benefit or marginal cost as a result. 
C)  Those in political power will likely receive a larger income. 
D)  Because the marginal benefit and marginal cost of work have been equally increased. 
E)  The premise of the question is incorrect because an equal distribution of income would increase rather than decrease the total amount produced. 
A)  Incentives to work are reduced. 
B)  No one can determine marginal benefit or marginal cost as a result. 
C)  Those in political power will likely receive a larger income. 
D)  Because the marginal benefit and marginal cost of work have been equally increased. 
E)  The premise of the question is incorrect because an equal distribution of income would increase rather than decrease the total amount produced.

Question 2

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 3

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 4

The concept of "the invisible hand" suggests that to attain efficiency,the government should

Accepted Answer

A)  guide economic activity. 
B)  set prices. 
C)  leave prices and output decisions to the competitive market. 
D)  regulate all production decisions, but not price decisions. 
E)  make sure that a command system is used to allocate resources. 
A)  guide economic activity. 
B)  set prices. 
C)  leave prices and output decisions to the competitive market. 
D)  regulate all production decisions, but not price decisions. 
E)  make sure that a command system is used to allocate resources.

Question 5

A point on the demand curve shows the

Accepted Answer

A)  price and the corresponding quantity demanded. 
B)  marginal benefit from that unit. 
C)  marginal cost to the seller of producing the unit. 
D)  Both answers A and B are correct. 
E)  Both answers A and C are correct. 
A)  price and the corresponding quantity demanded. 
B)  marginal benefit from that unit. 
C)  marginal cost to the seller of producing the unit. 
D)  Both answers A and B are correct. 
E)  Both answers A and C are correct.

Question 6

-In the above figure,if the market is in equilibrium,area A + area B + area C equals

Accepted Answer

A)  total surplus. 
B)  consumer surplus. 
C)  deadweight loss. 
D)  producer surplus. 
E)  total revenue. 
A)  total surplus. 
B)  consumer surplus. 
C)  deadweight loss. 
D)  producer surplus. 
E)  total revenue.

Question 7

To a seller,the cost of a good or service is ________ and the price is ________.

Accepted Answer

A)  what must be given up to produce the good or service; what is received for the good or service 
B)  what is received for the good or service; what must be given up to produce the good or service 
C)  the producer surplus the seller receives; the consumer surplus the buyer receives 
D)  the producer surplus the buyer receives; the consumer surplus the seller receives 
E)  None of the above answers is correct. 
A)  what must be given up to produce the good or service; what is received for the good or service 
B)  what is received for the good or service; what must be given up to produce the good or service 
C)  the producer surplus the seller receives; the consumer surplus the buyer receives 
D)  the producer surplus the buyer receives; the consumer surplus the seller receives 
E)  None of the above answers is correct.

Question 8

Marginal cost equals

Accepted Answer

A)  the profitability derived from producing another unit of output. 
B)  all the opportunity cost of producing the amount of output. 
C)  or exceeds the marginal benefit. 
D)  productive efficiency. 
E)  the opportunity cost of producing one more unit of output. 
A)  the profitability derived from producing another unit of output. 
B)  all the opportunity cost of producing the amount of output. 
C)  or exceeds the marginal benefit. 
D)  productive efficiency. 
E)  the opportunity cost of producing one more unit of output.

Question 9

Mark loves ice cream.At any point in time,he will buy an additional ice cream cone if

Accepted Answer

A)  the marginal benefit from it exceeds the price. 
B)  the marginal benefit from it is zero. 
C)  his willingness to pay is less than the price. 
D)  there is no deadweight loss produced by his purchase of a cone. 
E)  None of the above answers is correct. 
A)  the marginal benefit from it exceeds the price. 
B)  the marginal benefit from it is zero. 
C)  his willingness to pay is less than the price. 
D)  there is no deadweight loss produced by his purchase of a cone. 
E)  None of the above answers is correct.

Question 10

-In the above figure,if the quantity is equal to 2,500,000 units,the deadweight loss is equal to

Accepted Answer

A)  area B + area F. 
B)  area D + area I. 
C)  area C. 
D)  area G + area H. 
E)  None of the above answers is correct because the deadweight loss is equal to zero. 
A)  area B + area F. 
B)  area D + area I. 
C)  area C. 
D)  area G + area H. 
E)  None of the above answers is correct because the deadweight loss is equal to zero.

Question 11

Auditors working for a large accounting firm are often away from the office.When they are in the office,they are allowed to use any desk that is available.Which method is used to allocate desks?

Accepted Answer

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

Question 12

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.

Question 13

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 14

The demand curve is the same as another curve.Which curve is the same as the demand curve? Why are the curves the same?

Accepted Answer

The demand curve is the same as the marg

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

The marginal benefit of the first hotdog consumed is ________ the marginal benefit of the fifth hotdog consumed.

Accepted Answer

A)  equal to 
B)  less than 
C)  greater than 
D)  the inverse of 
E)  equal to 5 times 
A)  equal to 
B)  less than 
C)  greater than 
D)  the inverse of 
E)  equal to 5 times

Question 17

When the cost of producing a product is paid,at least in part,by someone other than the producer,the cost is referred to as

Accepted Answer

A)  an external cost. 
B)  an external profit. 
C)  an external benefit. 
D)  an external/internal cost. 
E)  a public cost. 
A)  an external cost. 
B)  an external profit. 
C)  an external benefit. 
D)  an external/internal cost. 
E)  a public cost.

Question 18

If the market for bicycles is efficient,then

Accepted Answer

A)  no more bicycles can be produced. 
B)  marginal benefit exceeds marginal cost. 
C)  consumer surplus must be greater than producer surplus. 
D)  it is not possible to produce more bicycles without sacrificing another, more highly valued good. 
E)  consumer surplus must equal producer surplus. 
A)  no more bicycles can be produced. 
B)  marginal benefit exceeds marginal cost. 
C)  consumer surplus must be greater than producer surplus. 
D)  it is not possible to produce more bicycles without sacrificing another, more highly valued good. 
E)  consumer surplus must equal producer surplus.

Question 19

-In the figure above,how much is the consumer who buys the 5,000th pizza willing to pay for that pizza?

Accepted Answer

A)  $15 
B)  $10 
C)  $12 
D)  $22.50 
E)  $5 
A)  $15 
B)  $10 
C)  $12 
D)  $22.50 
E)  $5

Question 20

-The figure above shows the demand curve for pizza and the market price of pizza.
In the figure above,how much do the consumers pay in total for the quantity of pizza they buy per day?

Accepted Answer

A)  $100,000 
B)  $150,000 
C)  $125,000 
D)  $50,000 
E)  None of the above answers is correct. 
A)  $100,000 
B)  $150,000 
C)  $125,000 
D)  $50,000 
E)  None of the above answers is correct.

Why does redistribution,so that the distribution of income is equal,bring about less total output?

A point on the supply curve can illustrate the

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.

The concept of "the invisible hand" suggests that to attain efficiency,the government should

A point on the demand curve shows the

-In the above figure,if the market is in equilibrium,area A + area B + area C equals

To a seller,the cost of a good or service is and the price is .

Marginal cost equals

Mark loves ice cream.At any point in time,he will buy an additional ice cream cone if

-In the above figure,if the quantity is equal to 2,500,000 units,the deadweight loss is equal to

Auditors working for a large accounting firm are often away from the office.When they are in the office,they are allowed to use any desk that is available.Which method is used to allocate desks?

When output is less than the efficient level,

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

The demand curve is the same as another curve.Which curve is the same as the demand curve? Why are the curves the same?

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

The marginal benefit of the first hotdog consumed is ________ the marginal benefit of the fifth hotdog consumed.

When the cost of producing a product is paid,at least in part,by someone other than the producer,the cost is referred to as

If the market for bicycles is efficient,then

-In the figure above,how much is the consumer who buys the 5,000th pizza willing to pay for that pizza?

-The figure above shows the demand curve for pizza and the market price of pizza. In the figure above,how much do the consumers pay in total for the quantity of pizza they buy per day?

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

Why does redistribution,so that the distribution of income is equal,bring about less total output?

A point on the supply curve can illustrate the

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.

The concept of "the invisible hand" suggests that to attain efficiency,the government should

A point on the demand curve shows the

-In the above figure,if the market is in equilibrium,area A + area B + area C equals

To a seller,the cost of a good or service is ________ and the price is ________.

Marginal cost equals

Mark loves ice cream.At any point in time,he will buy an additional ice cream cone if

-In the above figure,if the quantity is equal to 2,500,000 units,the deadweight loss is equal to

Auditors working for a large accounting firm are often away from the office.When they are in the office,they are allowed to use any desk that is available.Which method is used to allocate desks?

When output is less than the efficient level,

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

The demand curve is the same as another curve.Which curve is the same as the demand curve? Why are the curves the same?

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

The marginal benefit of the first hotdog consumed is ________ the marginal benefit of the fifth hotdog consumed.

When the cost of producing a product is paid,at least in part,by someone other than the producer,the cost is referred to as

If the market for bicycles is efficient,then

-In the figure above,how much is the consumer who buys the 5,000th pizza willing to pay for that pizza?

-The figure above shows the demand curve for pizza and the market price of pizza. In the figure above,how much do the consumers pay in total for the quantity of pizza they buy per day?

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

To a seller,the cost of a good or service is and the price is .