Question 1

What do economists call the loss society experiences when there is market failure and the production of a good is less than the efficient amount?

Accepted Answer

A)  tax 
B)  subsidy 
C)  price floor 
D)  deadweight loss 
E)  quantity restriction 
A)  tax 
B)  subsidy 
C)  price floor 
D)  deadweight loss 
E)  quantity restriction

Question 2

-The figure above shows the market for brooms.If 400 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 greater than marginal benefit. 
E)  consumer surplus equals zero. 
A)  consumer surplus is maximized. 
B)  producer surplus is maximized. 
C)  market failure and a deadweight loss occur. 
D)  marginal cost is greater than marginal benefit. 
E)  consumer surplus equals zero.

Question 3

If a landlord will rent an apartment only to married couples,the landlord is using a ________ allocation method.

Accepted Answer

A)  majority rule 
B)  market price 
C)  contest 
D)  personal characteristics 
E)  command 
A)  majority rule 
B)  market price 
C)  contest 
D)  personal characteristics 
E)  command

Question 4

As pointed out by the "big tradeoff," government action that redistributes incomes so that everyone has the same income leads to

Accepted Answer

A)  fairness according to the "fair rules" approach. 
B)  efficient markets. 
C)  resources being allocated according to a command system. 
D)  a smaller total output 
E)  lower taxes on the rich than on the poor so that the rich do not lose their incentive to work. 
A)  fairness according to the "fair rules" approach. 
B)  efficient markets. 
C)  resources being allocated according to a command system. 
D)  a smaller total output 
E)  lower taxes on the rich than on the poor so that the rich do not lose their incentive to work.

Question 5

The producer surplus is found by subtracting the ________ and then adding the difference for all units sold.

Accepted Answer

A)  marginal cost from price 
B)  price from marginal cost 
C)  marginal benefit from total benefit 
D)  marginal cost from marginal benefit 
E)  deadweight loss from the price 
A)  marginal cost from price 
B)  price from marginal cost 
C)  marginal benefit from total benefit 
D)  marginal cost from marginal benefit 
E)  deadweight loss from the price

Question 6

Subsidies ________ the price paid by the buyer and ________ the price received by the seller.

Accepted Answer

A)  increase, increase 
B)  increase, decrease 
C)  decrease, increase 
D)  decrease, decrease 
E)  do not change; increase 
A)  increase, increase 
B)  increase, decrease 
C)  decrease, increase 
D)  decrease, decrease 
E)  do not change; increase

Question 7

Efficiency occurs in a market when

Accepted Answer

A)  the sum of consumer surplus and producer surplus is maximized. 
B)  consumer surplus is equal to producer surplus. 
C)  consumer surplus is less than producer surplus. 
D)  consumer surplus is greater than producer surplus. 
E)  total revenue is maximized. 
A)  the sum of consumer surplus and producer surplus is maximized. 
B)  consumer surplus is equal to producer surplus. 
C)  consumer surplus is less than producer surplus. 
D)  consumer surplus is greater than producer surplus. 
E)  total revenue is maximized.

Question 8

In 2009,tickets to a Presidential Town Hall meeting were distributed to individuals through a random selection of those who registered on a website.The tickets were allocated by which method?

Accepted Answer

A)  lottery 
B)  majority rule 
C)  contest 
D)  first-come, first-served 
E)  personal characteristics 
A)  lottery 
B)  majority rule 
C)  contest 
D)  first-come, first-served 
E)  personal characteristics

Question 9

If the difference between the marginal benefit and the marginal cost of a good is as large as possible,

Accepted Answer

A)  resources are being used with maximum efficiency. 
B)  resources would create more value producing other goods and hence the production of this good should be decreased. 
C)  more of the good should be produced. 
D)  allocative efficiency has been attained. 
E)  Both answers A and D are correct. 
A)  resources are being used with maximum efficiency. 
B)  resources would create more value producing other goods and hence the production of this good should be decreased. 
C)  more of the good should be produced. 
D)  allocative efficiency has been attained. 
E)  Both answers A and D are correct.

Question 10

University of Colorado reserves 5,000 free tickets to each home football game for students.Students must stand in line to receive their ticket.Football tickets are allocated through which method?

Accepted Answer

A)  market price 
B)  sharing equally 
C)  personal characteristics 
D)  first-come, first-served 
E)  force 
A)  market price 
B)  sharing equally 
C)  personal characteristics 
D)  first-come, first-served 
E)  force

Question 11

Why does the problem of the big tradeoff arise when the government engages in the process of redistributing income using taxes and transfers?

Accepted Answer

There are two reasons why the big tradeo

Question 12

A supply curve shows the ________ of producing one more unit of a good or service.

Accepted Answer

A)  producer surplus 
B)  consumer surplus 
C)  total benefit 
D)  marginal cost 
E)  marginal benefit to the producer 
A)  producer surplus 
B)  consumer surplus 
C)  total benefit 
D)  marginal cost 
E)  marginal benefit to the producer

Question 13

A public good

Accepted Answer

A)  is a good that is usually consumed in public, such as a restaurant meal. 
B)  is a good people can consume even if they do not pay for it. 
C)  is a good produced by government. 
D)  results in an efficient allocation of resources. 
E)  is a good for which people are willing to pay a very high price. 
A)  is a good that is usually consumed in public, such as a restaurant meal. 
B)  is a good people can consume even if they do not pay for it. 
C)  is a good produced by government. 
D)  results in an efficient allocation of resources. 
E)  is a good for which people are willing to pay a very high price.

Question 14

The supply curve is the same as another curve.What other curve is the same as the supply curve? Why are the curves the same?

Accepted Answer

The supply curve is the same as the marg

Question 15

If the marginal benefit of a hot dog is greater than its marginal cost,then to increase efficiency,

Accepted Answer

A)  more hot dogs should be produced. 
B)  fewer hot dogs should be produced. 
C)  nothing should be done if the marginal benefit is greater than the marginal cost by the maximum amount because in this case the efficient quantity of hot dogs is being produced. 
D)  production should be halted. 
E)  More information is needed about the price of a hot dog in order to determine if production should be increased, decreased, or not changed. 
A)  more hot dogs should be produced. 
B)  fewer hot dogs should be produced. 
C)  nothing should be done if the marginal benefit is greater than the marginal cost by the maximum amount because in this case the efficient quantity of hot dogs is being produced. 
D)  production should be halted. 
E)  More information is needed about the price of a hot dog in order to determine if production should be increased, decreased, or not changed.

Question 16

Which of the following are the rules for finding the point of allocative efficiency?

Accepted Answer

A)  Produce on the PPF and then produce where the marginal benefit and marginal cost are as large as possible. 
B)  Produce on the PPF and then produce where marginal benefit equals marginal cost. 
C)  Produce on the PPF and then produce where marginal benefit and marginal cost are constant. 
D)  Produce on the PPF and then produce where the marginal benefit exceeds marginal cost by as much as possible. 
E)  Produce anywhere on the PPF. 
A)  Produce on the PPF and then produce where the marginal benefit and marginal cost are as large as possible. 
B)  Produce on the PPF and then produce where marginal benefit equals marginal cost. 
C)  Produce on the PPF and then produce where marginal benefit and marginal cost are constant. 
D)  Produce on the PPF and then produce where the marginal benefit exceeds marginal cost by as much as possible. 
E)  Produce anywhere on the PPF.

Question 17

-In the figure above,when 6,000 pizzas are produced,the marginal benefit of a pizza ________ its marginal cost,which means ________ pizza is being produced.

Accepted Answer

A)  exceeds its marginal cost; too little 
B)  exceeds its marginal cost; too much 
C)  is below its marginal cost; too much 
D)  is below its marginal cost; too little 
E)  equals its marginal cost; the efficient quantity of 
A)  exceeds its marginal cost; too little 
B)  exceeds its marginal cost; too much 
C)  is below its marginal cost; too much 
D)  is below its marginal cost; too little 
E)  equals its marginal cost; the efficient quantity of

Question 18

The "fair rules" view of fairness is based on

Accepted Answer

A)  income transfers from the rich to the poor. 
B)  property rights and voluntary exchange. 
C)  utilitarianism. 
D)  the big tradeoff. 
E)  allocating resources using majority rule. 
A)  income transfers from the rich to the poor. 
B)  property rights and voluntary exchange. 
C)  utilitarianism. 
D)  the big tradeoff. 
E)  allocating resources using majority rule.

Question 19

-The figure above shows the market for pizza.
a.If the price of a slice of pizza is $3,what is the consumer surplus of the 50th slice?
b.If the price of a slice of pizza is $3,what is the producer surplus of the 50th slice
c.What is the efficient quantity? What is the equilibrium quantity? What is the deadweight loss when the equilibrium quantity is produced?

Accepted Answer

a.Consumer surplus is the distance betwe

Question 20

Which of the following occurs when a market is efficient?

Accepted Answer

A)  Consumer surplus equals producer surplus. 
B)  Consumer surplus is as large as possible. 
C)  Producer surplus is as large as possible. 
D)  The sum of consumer surplus and producer surplus is maximized. 
E)  The marginal benefit exceeds the marginal cost by as much as possible. 
A)  Consumer surplus equals producer surplus. 
B)  Consumer surplus is as large as possible. 
C)  Producer surplus is as large as possible. 
D)  The sum of consumer surplus and producer surplus is maximized. 
E)  The marginal benefit exceeds the marginal cost by as much as possible.

What do economists call the loss society experiences when there is market failure and the production of a good is less than the efficient amount?

-The figure above shows the market for brooms.If 400 brooms are produced,

If a landlord will rent an apartment only to married couples,the landlord is using a ________ allocation method.

As pointed out by the "big tradeoff," government action that redistributes incomes so that everyone has the same income leads to

The producer surplus is found by subtracting the ________ and then adding the difference for all units sold.

Subsidies the price paid by the buyer and the price received by the seller.

Efficiency occurs in a market when

In 2009,tickets to a Presidential Town Hall meeting were distributed to individuals through a random selection of those who registered on a website.The tickets were allocated by which method?

If the difference between the marginal benefit and the marginal cost of a good is as large as possible,

University of Colorado reserves 5,000 free tickets to each home football game for students.Students must stand in line to receive their ticket.Football tickets are allocated through which method?

Why does the problem of the big tradeoff arise when the government engages in the process of redistributing income using taxes and transfers?

A supply curve shows the ________ of producing one more unit of a good or service.

A public good

The supply curve is the same as another curve.What other curve is the same as the supply curve? Why are the curves the same?

If the marginal benefit of a hot dog is greater than its marginal cost,then to increase efficiency,

Which of the following are the rules for finding the point of allocative efficiency?

-In the figure above,when 6,000 pizzas are produced,the marginal benefit of a pizza its marginal cost,which means pizza is being produced.

The "fair rules" view of fairness is based on

Which of the following occurs when a market is efficient?

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

What do economists call the loss society experiences when there is market failure and the production of a good is less than the efficient amount?

-The figure above shows the market for brooms.If 400 brooms are produced,

If a landlord will rent an apartment only to married couples,the landlord is using a ________ allocation method.

As pointed out by the "big tradeoff," government action that redistributes incomes so that everyone has the same income leads to

The producer surplus is found by subtracting the ________ and then adding the difference for all units sold.

Subsidies ________ the price paid by the buyer and ________ the price received by the seller.

Efficiency occurs in a market when

In 2009,tickets to a Presidential Town Hall meeting were distributed to individuals through a random selection of those who registered on a website.The tickets were allocated by which method?

If the difference between the marginal benefit and the marginal cost of a good is as large as possible,

University of Colorado reserves 5,000 free tickets to each home football game for students.Students must stand in line to receive their ticket.Football tickets are allocated through which method?

Why does the problem of the big tradeoff arise when the government engages in the process of redistributing income using taxes and transfers?

A supply curve shows the ________ of producing one more unit of a good or service.

A public good

The supply curve is the same as another curve.What other curve is the same as the supply curve? Why are the curves the same?

If the marginal benefit of a hot dog is greater than its marginal cost,then to increase efficiency,

Which of the following are the rules for finding the point of allocative efficiency?

-In the figure above,when 6,000 pizzas are produced,the marginal benefit of a pizza ________ its marginal cost,which means ________ pizza is being produced.

The "fair rules" view of fairness is based on

Which of the following occurs when a market is efficient?

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

Subsidies the price paid by the buyer and the price received by the seller.

-In the figure above,when 6,000 pizzas are produced,the marginal benefit of a pizza its marginal cost,which means pizza is being produced.