Question 1

-The figure above represents the competitive market for slices of key lime pie.If the production is 80 slices per day,the cost of the 80th slice is

Accepted Answer

A)  less than anyone is willing to pay for it. 
B)  more than anyone is willing to pay for it. 
C)  equal to what someone is willing to pay for it. 
D)  indeterminant. 
E)  equal to the deadweight loss from the 80th slice. 
A)  less than anyone is willing to pay for it. 
B)  more than anyone is willing to pay for it. 
C)  equal to what someone is willing to pay for it. 
D)  indeterminant. 
E)  equal to the deadweight loss from the 80th slice.

Question 2

According to the "fair rules" view of fairness,are taxes fair? Explain.

Accepted Answer

Taxes are unfair according to the fair r

Question 3

-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 4

What must be true for a consumer to enjoy a consumer surplus from a unit of a good?

Accepted Answer

The marginal benefit to the co

Question 5

Which describes the economic meanings of value and price?

Accepted Answer

A)  Value is exchange worth minus marginal benefit and price is the dollars that must be paid. 
B)  Value is the marginal benefit obtained and price is the dollars that must be paid. 
C)  Value refers to the gain the producer gets from the good or service and price refers to the gain the consumer gets from the good or service. 
D)  Value refers to the dollars that must be paid and price refers to the cost of producing the good. 
E)  They are the same and both mean the dollars that must be paid. 
A)  Value is exchange worth minus marginal benefit and price is the dollars that must be paid. 
B)  Value is the marginal benefit obtained and price is the dollars that must be paid. 
C)  Value refers to the gain the producer gets from the good or service and price refers to the gain the consumer gets from the good or service. 
D)  Value refers to the dollars that must be paid and price refers to the cost of producing the good. 
E)  They are the same and both mean the dollars that must be paid.

Question 6

Allocative efficiency occurs when

Accepted Answer

A)  the most highly valued goods and services are produced. 
B)  all citizens have equal access to goods and services. 
C)  the environment is protected at all cost. 
D)  goods and services are free. 
E)  production takes place at any point on the PPF. 
A)  the most highly valued goods and services are produced. 
B)  all citizens have equal access to goods and services. 
C)  the environment is protected at all cost. 
D)  goods and services are free. 
E)  production takes place at any point on the PPF.

Question 7

If the government imposes a tax on a competitive market with no externalities,then
i.resource use is not efficient.
ii.there is a deadweight loss.
iii.consumer surplus is at its maximum.

Accepted Answer

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

Question 8

If the demand for a good does not change,how will an increase in the price of that good affect the consumer surplus from it?

Accepted Answer

The consumer surplus equals the differen

Question 9

Suppose Jennifer derives $100 in marginal benefits from her first skiing trip and $80 from her third trip.Her marginal benefit from her second trip is likely to be

Accepted Answer

A)  more than $100. 
B)  between $100 and $80. 
C)  between $79 and $51. 
D)  less than $51. 
E)  some amount that cannot be calculated without additional information. 
A)  more than $100. 
B)  between $100 and $80. 
C)  between $79 and $51. 
D)  less than $51. 
E)  some amount that cannot be calculated without additional information.

Question 10

The price of a shirt is $20.Charlie can produce a shirt at a marginal cost of $10,Mac can produce a shirt for $18,and Dennis can produce a shirt for $22.For a shirt,Deandra has a marginal benefit of $25,Frank has marginal benefit of $20,and Artemis has a marginal benefit of $18.Which of the following statements is correct?

Accepted Answer

A)  The sum of consumer surplus is $5 and the sum of producer surplus is $12. 
B)  The sum of consumer surplus is $12. 
C)  Only Frank and Artemis will purchase a shirt. 
D)  Only Dennis will produce a shirt. 
E)  The sum of producer surplus is $10. 
A)  The sum of consumer surplus is $5 and the sum of producer surplus is $12. 
B)  The sum of consumer surplus is $12. 
C)  Only Frank and Artemis will purchase a shirt. 
D)  Only Dennis will produce a shirt. 
E)  The sum of producer surplus is $10.

Question 11

-The figure above shows the competitive market for slices of key lime pie.If the production is 40 slices per day,someone is willing to buy another slice of pie for

Accepted Answer

A)  more than it costs to produce the slice. 
B)  less than it costs to produce the slice. 
C)  an amount equal to the cost of producing the slice. 
D)  an amount equal to the cost of producing all 40 slices. 
E)  an amount that is not comparable to the cost of producing the slice. 
A)  more than it costs to produce the slice. 
B)  less than it costs to produce the slice. 
C)  an amount equal to the cost of producing the slice. 
D)  an amount equal to the cost of producing all 40 slices. 
E)  an amount that is not comparable to the cost of producing the slice.

Question 12

A supply curve is the same as a

Accepted Answer

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

Question 13

-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 14

-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 15

Which of the following is true? When there are no externalities,public goods,common resources,taxes or subsidies,then
i.allocative efficiency occurs when marginal benefit exceeds marginal cost by as much as possible.
ii.an a competitive equilibrium,resource allocation is efficient.
iii.fair rules require income transfers from the rich to the poor.

Accepted Answer

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

Question 16

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 17

Compare and contrast production efficiency and allocative efficiency.

Accepted Answer

Production efficiency means that we are

Question 18

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 19

-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 20

Bill Gates is a founder of Microsoft and the world's richest individual.Suppose Microsoft sells more software and Mr.Gates acquires another billion dollars in wealth.Simultaneously,suppose a burglar whose income is well below average broke into Bill Gates' house and stole a million dollars' worth of antiques.Using the "it's not fair if the rules aren't fair" approach to fairness,is Mr.Gates' acquisition of additional wealth fair? Is the (poor)thief's acquisition fair?

Accepted Answer

In order for Mr.Gates to become richer,M

-The figure above represents the competitive market for slices of key lime pie.If the production is 80 slices per day,the cost of the 80th slice is

According to the "fair rules" view of fairness,are taxes fair? Explain.

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

What must be true for a consumer to enjoy a consumer surplus from a unit of a good?

Which describes the economic meanings of value and price?

Allocative efficiency occurs when

If the government imposes a tax on a competitive market with no externalities,then i.resource use is not efficient. ii.there is a deadweight loss. iii.consumer surplus is at its maximum.

If the demand for a good does not change,how will an increase in the price of that good affect the consumer surplus from it?

Suppose Jennifer derives $100 in marginal benefits from her first skiing trip and $80 from her third trip.Her marginal benefit from her second trip is likely to be

-The figure above shows the competitive market for slices of key lime pie.If the production is 40 slices per day,someone is willing to buy another slice of pie for

A supply curve is the same as a

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

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

The marginal benefit of a taco is measured by

Compare and contrast production efficiency and allocative efficiency.

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

-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?

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 represents the competitive market for slices of key lime pie.If the production is 80 slices per day,the cost of the 80th slice is

According to the "fair rules" view of fairness,are taxes fair? Explain.

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

What must be true for a consumer to enjoy a consumer surplus from a unit of a good?

Which describes the economic meanings of value and price?

Allocative efficiency occurs when

If the government imposes a tax on a competitive market with no externalities,then i.resource use is not efficient. ii.there is a deadweight loss. iii.consumer surplus is at its maximum.

If the demand for a good does not change,how will an increase in the price of that good affect the consumer surplus from it?

Suppose Jennifer derives $100 in marginal benefits from her first skiing trip and $80 from her third trip.Her marginal benefit from her second trip is likely to be

-The figure above shows the competitive market for slices of key lime pie.If the production is 40 slices per day,someone is willing to buy another slice of pie for

A supply curve is the same as a

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

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

The marginal benefit of a taco is measured by

Compare and contrast production efficiency and allocative efficiency.

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

-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?

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