Exam 6: Efficiency and Fairness of Markets

-The figure above shows the PPF,marginal cost curve,and marginal benefit curve for pizza. In the figure above,when 2,000 pizzas are produced,the marginal benefit of a pizza ________ its marginal cost,which means ________ pizza is being produced.

In December 2010,Kansas had a severe ice storm that caused electrical blackouts.The Fictitious Portable Generator firm of Lawrence had several portable generators that could be used by homeowners to provide electricity.Which of the following would be the fair-rules way to provide them?

The consumer acquires a consumer surplus on a good if the marginal benefit is

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

Often people trying to withdraw money from their bank must wait in line,which reflects a ________ allocation method.

Producer surplus is the ________ summed over the quantity produced.

The concept of "the invisible hand" suggests that markets

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

Moving ________ along the marginal cost curve,the ________.

When a market is efficient,the

When underproduction occurs,

The figure above shows the market for pizza. -In the figure above,if pizza production is restricted to 5,000 pizzas a day,then marginal benefit ________ marginal cost,and ________ occurs.

A good or service can be consumed by a person even if he or she didn't pay for it is called ________ good.

-In the figure above,if the market is at equilibrium,then the total consumer surplus equals the area ________ and the total producer surplus equals the area ________.

As more of a good is consumed,marginal benefit ________ and as more of a good is produced,marginal cost ________.

Allocative efficiency occurs

Which of the following can result in a market producing an inefficient quantity of a good? i.competition ii.an external cost or an external benefit iii.a tax

What must be true for a producer to obtain a producer surplus from the sale of a unit of a good?

-The figure above shows Cindy's demand for CDs per year. a.What is Cindy's consumer surplus on all the CDs consumed if the price of a CD is $12? b.What is Cindy's consumer surplus on all the CDs consumed if the price of a CD is $9? c.What happens to Cindy's consumer surplus when the price of a CD falls?

The price of a cowboy hat is $100.Willie can produce a hat at a marginal cost of $130,Waylon can produce at a marginal cost of $100,and Merle can produce at a marginal cost of $85.Which of the following statements is correct?