Exam 6: Efficiency and Fairness of Markets

Jake just bought a new hockey stick.When he was leaving the shop,he thought that he such a great deal and would have paid $50 more dollars for the stick.Jake received

Suppose Dan is willing to pay a maximum of $3,000 for a piano,but finds one he can buy for $2,500.Dan's consumer surplus from this piano is

Assume the Nozick rules are being followed in the economy so that the distribution of income is fair.What must be true for this to create an efficient allocation of resources?

-The figure above represents the competitive market for slices of key lime pie.When 60 slices are produced,the marginal cost

Graphically,producer surplus is the area under the

Why is a competitive market efficient?

At a competitive equilibrium with no externalities,taxes,subsidies,public goods,common resources,or high transactions costs,which of the following occurs? i.an efficient outcome ii.definitely a fair outcome when judged by the fair-results approach iii.marginal cost equals marginal benefit iv.producer surplus equals consumer surplus

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.If Scott offers two swim tours per week,he incurs a marginal cost of

Marginal benefit equals the

When the city of Fresno holds a referendum to determine if taxes will be raised to pay for road repairs,the city is using a ________ allocation method.

In a competitive market for a private good with no price or quantity regulations,no external cost nor external benefit,low transactions costs,and no taxes or subsidies,

When economists refer to "the invisible hand," what do they mean?

Lauren and Katy each bought a new bike lock for $20.Both Lauren and Katy would have paid $25 for the lock.Katy's consumer surplus equaled

-The table above shows the production possibilities frontier for the nation of Isolanda. a.Find the marginal cost of a pound of fish using the above PPF. b.How does the marginal cost of a pound of fish change as more fish are caught?

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

-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?

To achieve ________,marginal cost ________ marginal benefit.

Which of the following situations describing a resource allocation method most resembles the market price method?

If an economy is allocatively efficient,it must be producing

When people cannot be excluded from consuming a good,even if they have not paid for the good,competitive markets would