Question 1

The figure above shows the supply curve for pizza and the market price of pizza.
-In the figure above,the total revenue from pizza per day is

Accepted Answer

A)  $60,000. 
B)  $100,000. 
C)  $40,000. 
D)  $80,000. 
E)  $50,000. 
A)  $60,000. 
B)  $100,000. 
C)  $40,000. 
D)  $80,000. 
E)  $50,000.

Question 2

At the current production point on a nation's production possibilities frontier,the marginal benefit of a slice of pizza is 500 tacos while the marginal cost of producing a slice of pizza is 750 tacos.For the nation to produce at the point of allocative efficiency,what should be done?

Accepted Answer

The marginal benefit of a slic

Question 3

The concept of "the invisible hand" suggests that

Accepted Answer

A)  products are produced out of a seller's sense of charity. 
B)  when the seller is better off, the buyer is worse off. 
C)  sellers exploit consumers with high prices. 
D)  buyers and sellers are self-interested. 
E)  the command system is the only way of efficiently allocating resources. 
A)  products are produced out of a seller's sense of charity. 
B)  when the seller is better off, the buyer is worse off. 
C)  sellers exploit consumers with high prices. 
D)  buyers and sellers are self-interested. 
E)  the command system is the only way of efficiently allocating resources.

Question 4

To achieve allocative efficiency,one must compare the

Accepted Answer

A)  marginal cost of a good to its opportunity cost. 
B)  opportunity cost to the attainable point on the production possibilities frontier. 
C)  marginal benefit of a good to its marginal cost. 
D)  marginal cost to the production efficiency cost. 
E)  point of production efficiency to the point of allocative efficiency. 
A)  marginal cost of a good to its opportunity cost. 
B)  opportunity cost to the attainable point on the production possibilities frontier. 
C)  marginal benefit of a good to its marginal cost. 
D)  marginal cost to the production efficiency cost. 
E)  point of production efficiency to the point of allocative efficiency.

Question 5

-The figure above shows the market for brooms.If 800 brooms are produced,

Accepted Answer

A)  consumer surplus is maximized. 
B)  producer surplus is maximized. 
C)  market failure and a deadweight loss occur. 
D)  marginal cost is less than marginal benefit. 
E)  there is no deadweight loss. 
A)  consumer surplus is maximized. 
B)  producer surplus is maximized. 
C)  market failure and a deadweight loss occur. 
D)  marginal cost is less than marginal benefit. 
E)  there is no deadweight loss.

Question 6

If the price is greater than the marginal cost of producing a good,the seller has

Accepted Answer

A)  no benefit from the sale. 
B)  a loss. 
C)  some producer surplus from the sale. 
D)  some negative consumer surplus from the sale. 
E)  None of the above answers is correct. 
A)  no benefit from the sale. 
B)  a loss. 
C)  some producer surplus from the sale. 
D)  some negative consumer surplus from the sale. 
E)  None of the above answers is correct.

Question 7

When the marginal cost of producing a bike is greater than the marginal benefit of the bike,for resource use to be allocatively efficient

Accepted Answer

A)  more bikes should be produced. 
B)  fewer bikes should be produced. 
C)  no more and no fewer bikes should be produced. 
D)  it must be determined if the production of bikes can be increased. 
E)  people must be educated to demand more bikes. 
A)  more bikes should be produced. 
B)  fewer bikes should be produced. 
C)  no more and no fewer bikes should be produced. 
D)  it must be determined if the production of bikes can be increased. 
E)  people must be educated to demand more bikes.

Question 8

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The ________ price that must be offered so that the 10,000th soda is produced is ________.

Accepted Answer

A)  minimum; $0.50 
B)  minimum; $1.00 
C)  maximum; $0.50 
D)  maximum; $1.00 
E)  minimum; more than $0.50 but less than $1.00 
A)  minimum; $0.50 
B)  minimum; $1.00 
C)  maximum; $0.50 
D)  maximum; $1.00 
E)  minimum; more than $0.50 but less than $1.00

Question 9

Suppose a market produces 5,000 tons of wheat.At this quantity,the marginal cost exceeds the marginal benefit.This outcome could be the result of

Accepted Answer

A)  a quantity regulation limiting the amount that can be produced. 
B)  a monopoly. 
C)  a subsidy. 
D)  an external benefit. 
E)  producing a public good. 
A)  a quantity regulation limiting the amount that can be produced. 
B)  a monopoly. 
C)  a subsidy. 
D)  an external benefit. 
E)  producing a public good.

Question 10

An unequal distribution of income is considered fair according to Robert Nozick if

Accepted Answer

A)  marginal cost equals marginal benefit. 
B)  the cost of administering a welfare system is minimized. 
C)  property rights are enforced and voluntary exchange occurs. 
D)  the economy is producing its maximum total output. 
E)  resources are allocated using the command method. 
A)  marginal cost equals marginal benefit. 
B)  the cost of administering a welfare system is minimized. 
C)  property rights are enforced and voluntary exchange occurs. 
D)  the economy is producing its maximum total output. 
E)  resources are allocated using the command method.

Question 11

-In the figure above,at the market price of $15,the consumer surplus equals

Accepted Answer

A)  $10,000. 
B)  $30,000. 
C)  $40,000. 
D)  2,000 units. 
E)  $20,000. 
A)  $10,000. 
B)  $30,000. 
C)  $40,000. 
D)  2,000 units. 
E)  $20,000.

Question 12

Which of the following occurs when a market is efficient?

Accepted Answer

A)  Producers earn the highest income possible. 
B)  Production costs equal total benefit. 
C)  Consumer surplus equals producer surplus. 
D)  Scarce resources are used to produce the goods and services that people value most highly. 
E)  Every consumer has all of the good or service he or she wants. 
A)  Producers earn the highest income possible. 
B)  Production costs equal total benefit. 
C)  Consumer surplus equals producer surplus. 
D)  Scarce resources are used to produce the goods and services that people value most highly. 
E)  Every consumer has all of the good or service he or she wants.

Question 13

-In the figure above,suppose the market is at equilibrium.Then area A is the

Accepted Answer

A)  marginal benefit. 
B)  marginal cost. 
C)  amount of the consumer surplus. 
D)  amount of the producer surplus. 
E)  deadweight loss. 
A)  marginal benefit. 
B)  marginal cost. 
C)  amount of the consumer surplus. 
D)  amount of the producer surplus. 
E)  deadweight loss.

Question 14

At a competitive equilibrium,if there are no taxes,subsidies,price regulations,quantity regulations,or externalities

Accepted Answer

A)  the marginal benefit is greater than the marginal cost. 
B)  resource use is efficient. 
C)  the marginal benefit is less than the marginal cost. 
D)  both the marginal benefit and the marginal cost of the last unit produced equal zero. 
E)  the marginal benefit is greater than the marginal cost by as much as possible. 
A)  the marginal benefit is greater than the marginal cost. 
B)  resource use is efficient. 
C)  the marginal benefit is less than the marginal cost. 
D)  both the marginal benefit and the marginal cost of the last unit produced equal zero. 
E)  the marginal benefit is greater than the marginal cost by as much as possible.

Question 15

Consumer surplus is equal to

Accepted Answer

A)  marginal benefit minus price summed over the quantity consumed. 
B)  price minus marginal benefit summed over the quantity consumed. 
C)  marginal benefit summed over the quantity consumed. 
D)  price multiplied by the quantity consumed. 
E)  marginal benefit plus price summed over the quantity consumed. 
A)  marginal benefit minus price summed over the quantity consumed. 
B)  price minus marginal benefit summed over the quantity consumed. 
C)  marginal benefit summed over the quantity consumed. 
D)  price multiplied by the quantity consumed. 
E)  marginal benefit plus price summed over the quantity consumed.

Question 16

Seventy percent of Austin's chess club wanted to purchase new chess sets and thirty percent did not.The club purchased the sets.Which method of allocation best describes the choice to purchase the sets?

Accepted Answer

A)  force 
B)  sharing equally 
C)  command 
D)  majority rule 
E)  lottery 
A)  force 
B)  sharing equally 
C)  command 
D)  majority rule 
E)  lottery

Question 17

-In the above figure,what is the marginal cost of the 8th pizza?

Accepted Answer

A)  $1.50 
B)  $12 
C)  $6 
D)  $96 
E)  8 pizzas 
A)  $1.50 
B)  $12 
C)  $6 
D)  $96 
E)  8 pizzas

Question 18

The marginal cost curves slope upward because of the principle of

Accepted Answer

A)  decreasing marginal benefits. 
B)  increasing marginal cost. 
C)  increasing marginal benefits. 
D)  decreasing marginal cost. 
E)  decreasing total benefit. 
A)  decreasing marginal benefits. 
B)  increasing marginal cost. 
C)  increasing marginal benefits. 
D)  decreasing marginal cost. 
E)  decreasing total benefit.

Question 19

The "big tradeoff" refers to

Accepted Answer

A)  producing capital goods instead of consumable goods. 
B)  marginal benefit versus marginal cost. 
C)  efficiency and fairness. 
D)  taking an economics course instead of some other course. 
E)  using market prices rather than a command system to allocate resources. 
A)  producing capital goods instead of consumable goods. 
B)  marginal benefit versus marginal cost. 
C)  efficiency and fairness. 
D)  taking an economics course instead of some other course. 
E)  using market prices rather than a command system to allocate resources.

Question 20

-The figure above shows the marginal benefit and marginal cost curves for pizza.In the figure,what is the efficient quantity of pizza?

Accepted Answer

A)  0 pizzas 
B)  10,000 pizzas 
C)  20,000 pizzas 
D)  30,000 pizzas 
E)  The efficient quantity cannot be determine without more information. 
A)  0 pizzas 
B)  10,000 pizzas 
C)  20,000 pizzas 
D)  30,000 pizzas 
E)  The efficient quantity cannot be determine without more information.

The figure above shows the supply curve for pizza and the market price of pizza. -In the figure above,the total revenue from pizza per day is

At the current production point on a nation's production possibilities frontier,the marginal benefit of a slice of pizza is 500 tacos while the marginal cost of producing a slice of pizza is 750 tacos.For the nation to produce at the point of allocative efficiency,what should be done?

The concept of "the invisible hand" suggests that

To achieve allocative efficiency,one must compare the

-The figure above shows the market for brooms.If 800 brooms are produced,

If the price is greater than the marginal cost of producing a good,the seller has

When the marginal cost of producing a bike is greater than the marginal benefit of the bike,for resource use to be allocatively efficient

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The price that must be offered so that the 10,000th soda is produced is .

Suppose a market produces 5,000 tons of wheat.At this quantity,the marginal cost exceeds the marginal benefit.This outcome could be the result of

An unequal distribution of income is considered fair according to Robert Nozick if

-In the figure above,at the market price of $15,the consumer surplus equals

Which of the following occurs when a market is efficient?

-In the figure above,suppose the market is at equilibrium.Then area A is the

At a competitive equilibrium,if there are no taxes,subsidies,price regulations,quantity regulations,or externalities

Consumer surplus is equal to

Seventy percent of Austin's chess club wanted to purchase new chess sets and thirty percent did not.The club purchased the sets.Which method of allocation best describes the choice to purchase the sets?

-In the above figure,what is the marginal cost of the 8th pizza?

The marginal cost curves slope upward because of the principle of

The "big tradeoff" refers to

-The figure above shows the marginal benefit and marginal cost curves for pizza.In the figure,what is the efficient quantity of pizza?

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 supply curve for pizza and the market price of pizza. -In the figure above,the total revenue from pizza per day is

At the current production point on a nation's production possibilities frontier,the marginal benefit of a slice of pizza is 500 tacos while the marginal cost of producing a slice of pizza is 750 tacos.For the nation to produce at the point of allocative efficiency,what should be done?

The concept of "the invisible hand" suggests that

To achieve allocative efficiency,one must compare the

-The figure above shows the market for brooms.If 800 brooms are produced,

If the price is greater than the marginal cost of producing a good,the seller has

When the marginal cost of producing a bike is greater than the marginal benefit of the bike,for resource use to be allocatively efficient

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The ________ price that must be offered so that the 10,000th soda is produced is ________.

Suppose a market produces 5,000 tons of wheat.At this quantity,the marginal cost exceeds the marginal benefit.This outcome could be the result of

An unequal distribution of income is considered fair according to Robert Nozick if

-In the figure above,at the market price of $15,the consumer surplus equals

Which of the following occurs when a market is efficient?

-In the figure above,suppose the market is at equilibrium.Then area A is the

At a competitive equilibrium,if there are no taxes,subsidies,price regulations,quantity regulations,or externalities

Consumer surplus is equal to

Seventy percent of Austin's chess club wanted to purchase new chess sets and thirty percent did not.The club purchased the sets.Which method of allocation best describes the choice to purchase the sets?

-In the above figure,what is the marginal cost of the 8th pizza?

The marginal cost curves slope upward because of the principle of

The "big tradeoff" refers to

-The figure above shows the marginal benefit and marginal cost curves for pizza.In the figure,what is the efficient quantity of pizza?

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 the supply curve for soda.The market price is $1.00 per soda.The price that must be offered so that the 10,000th soda is produced is .