Question 1

When there is a cost or benefit that affects someone other than the seller and buyer,then there is

Accepted Answer

A)  a tax. 
B)  a subsidy. 
C)  a quantity regulation. 
D)  a price regulation. 
E)  an externality. 
A)  a tax. 
B)  a subsidy. 
C)  a quantity regulation. 
D)  a price regulation. 
E)  an externality.

Question 2

-In the figure above,if the market is at equilibrium,the sum of the total consumer surplus and the total producer surplus is

Accepted Answer

A)  $240. 
B)  $600. 
C)  $1,000. 
D)  $0. 
E)  $60. 
A)  $240. 
B)  $600. 
C)  $1,000. 
D)  $0. 
E)  $60.

Question 3

Explain how the invisible hand delivers an efficient market outcome.

Accepted Answer

The invisible hand concepts claims that

Question 4

-In the above figure,what is the marginal cost of the 4th pizza?

Accepted Answer

A)  $0 
B)  $4 
C)  $9 
D)  $36 
E)  4 pizzas 
A)  $0 
B)  $4 
C)  $9 
D)  $36 
E)  4 pizzas

Question 5

The fair results approach to fairness

Accepted Answer

A)  requires property rights and voluntary exchange. 
B)  supports transferring income from the rich and giving it to the poor. 
C)  requires efficient market outcomes. 
D)  ensures that marginal cost equals marginal benefit. 
E)  never creates a big tradeoff. 
A)  requires property rights and voluntary exchange. 
B)  supports transferring income from the rich and giving it to the poor. 
C)  requires efficient market outcomes. 
D)  ensures that marginal cost equals marginal benefit. 
E)  never creates a big tradeoff.

Question 6

Overproduction results in

Accepted Answer

A)  external costs. 
B)  external benefits. 
C)  deadweight loss. 
D)  super-efficiency. 
E)  the marginal benefit of the last unit produced being larger than the marginal cost. 
A)  external costs. 
B)  external benefits. 
C)  deadweight loss. 
D)  super-efficiency. 
E)  the marginal benefit of the last unit produced being larger than the marginal cost.

Question 7

-The figure above shows the market for hot dogs.
a.What is the maximum price consumers are willing to pay for the 25th hot dog?
b.What is the efficient quantity?
c.Suppose that the production was limited to 25 hot dogs.In the figure,indicate the amount of the deadweight loss.

Accepted Answer

a.Consumers are willing to pay a maximum

Question 8

-The figure above shows Lauren's demand curve for Barbie dolls and the market price for Barbie dolls.Using the area of the consumer surplus triangle,Lauren's total consumer surplus from purchasing 3 dolls is

Accepted Answer

A)  $5.50. 
B)  $10.00. 
C)  $22.50. 
D)  $45.00. 
E)  3 dolls. 
A)  $5.50. 
B)  $10.00. 
C)  $22.50. 
D)  $45.00. 
E)  3 dolls.

Question 9

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's consumer surplus from her 10th soda is

Accepted Answer

A)  $0.00. 
B)  $0.50. 
C)  $1.00. 
D)  $1.50. 
E)  $2.50. 
A)  $0.00. 
B)  $0.50. 
C)  $1.00. 
D)  $1.50. 
E)  $2.50.

Question 10

All points on the production possibilities frontier

Accepted Answer

A)  are production inefficient. 
B)  achieve allocative efficiency. 
C)  are production efficient but only one point achieves allocative efficiency. 
D)  are allocatively efficient but only one point achieves production efficiency. 
E)  are allocatively inefficient. 
A)  are production inefficient. 
B)  achieve allocative efficiency. 
C)  are production efficient but only one point achieves allocative efficiency. 
D)  are allocatively efficient but only one point achieves production efficiency. 
E)  are allocatively inefficient.

Question 11

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

Accepted Answer

A)  marginal cost of 150th unit. 
B)  willingness to pay for the 150th unit. 
C)  producer surplus. 
D)  consumer surplus. 
E)  marginal benefit of 150th unit. 
A)  marginal cost of 150th unit. 
B)  willingness to pay for the 150th unit. 
C)  producer surplus. 
D)  consumer surplus. 
E)  marginal benefit of 150th unit.

Question 12

When technology increases the supply of a good and lower prices increase the quantity demanded,

Accepted Answer

A)  the economy is reallocating resources to achieve an efficient allocation. 
B)  consumer surplus falls. 
C)  the invisible hand is unnecessary. 
D)  the marginal benefit of the good increases with the quantity produced. 
E)  the economy is no longer efficient because the quantity changes. 
A)  the economy is reallocating resources to achieve an efficient allocation. 
B)  consumer surplus falls. 
C)  the invisible hand is unnecessary. 
D)  the marginal benefit of the good increases with the quantity produced. 
E)  the economy is no longer efficient because the quantity changes.

Question 13

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

Accepted Answer

A)  Seventy percent of Austin's chess club wanted to purchase new chess sets and thirty percent did not. The club purchased the sets. 
B)  Lattes are sold at Starbucks. 
C)  Food from the Weld County Food Bank is distributed to families in need. 
D)  Jose works at Intel. His manager tells him what work needs to be completed each month. 
E)  Matt's mother had the rule that whoever cuts the cake chooses their slice last. 
A)  Seventy percent of Austin's chess club wanted to purchase new chess sets and thirty percent did not. The club purchased the sets. 
B)  Lattes are sold at Starbucks. 
C)  Food from the Weld County Food Bank is distributed to families in need. 
D)  Jose works at Intel. His manager tells him what work needs to be completed each month. 
E)  Matt's mother had the rule that whoever cuts the cake chooses their slice last.

Question 14

"If there is an inefficient level of nursing care in South America,a deadweight loss exists." Is this statement true or false?

Accepted Answer

The statement is tru

Question 15

What is producer surplus?

Accepted Answer

Producer surplus equals the di

Question 16

Canned milk was only rationed to babies and small children during World War 2.This rationing was an example of allocation by

Accepted Answer

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

Question 17

The idea of the "big tradeoff" points out the costs of

Accepted Answer

A)  using a results approach to fairness when the rules approach is correct. 
B)  transferring income using taxes that decrease efficiency. 
C)  price hikes during natural disasters. 
D)  using a rules approach to fairness when the results approach is correct. 
E)  None of the above answers is correct. 
A)  using a results approach to fairness when the rules approach is correct. 
B)  transferring income using taxes that decrease efficiency. 
C)  price hikes during natural disasters. 
D)  using a rules approach to fairness when the results approach is correct. 
E)  None of the above answers is correct.

Question 18

The figure above shows the supply curve for pizza and the market price of pizza.
-In the figure above,the producer surplus 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 19

In a figure,the consumer surplus is equal to the area ________ the ________ curve and ________ the price.

Accepted Answer

A)  above; demand; above 
B)  below; supply; below 
C)  below; demand; below 
D)  below; demand; above 
E)  above; supply; below 
A)  above; demand; above 
B)  below; supply; below 
C)  below; demand; below 
D)  below; demand; above 
E)  above; supply; below

Question 20

The point that each glass of lemonade consumed on a hot day brings lower and lower levels of satisfaction is known as the principle of

Accepted Answer

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

When there is a cost or benefit that affects someone other than the seller and buyer,then there is

-In the figure above,if the market is at equilibrium,the sum of the total consumer surplus and the total producer surplus is

Explain how the invisible hand delivers an efficient market outcome.

-In the above figure,what is the marginal cost of the 4th pizza?

The fair results approach to fairness

Overproduction results in

-The figure above shows the market for hot dogs. a.What is the maximum price consumers are willing to pay for the 25th hot dog? b.What is the efficient quantity? c.Suppose that the production was limited to 25 hot dogs.In the figure,indicate the amount of the deadweight loss.

-The figure above shows Lauren's demand curve for Barbie dolls and the market price for Barbie dolls.Using the area of the consumer surplus triangle,Lauren's total consumer surplus from purchasing 3 dolls is

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's consumer surplus from her 10th soda is

All points on the production possibilities frontier

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

When technology increases the supply of a good and lower prices increase the quantity demanded,

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

"If there is an inefficient level of nursing care in South America,a deadweight loss exists." Is this statement true or false?

What is producer surplus?

Canned milk was only rationed to babies and small children during World War 2.This rationing was an example of allocation by

The idea of the "big tradeoff" points out the costs of

The figure above shows the supply curve for pizza and the market price of pizza. -In the figure above,the producer surplus is

In a figure,the consumer surplus is equal to the area the curve and the price.

The point that each glass of lemonade consumed on a hot day brings lower and lower levels of satisfaction is known as the principle of

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

When there is a cost or benefit that affects someone other than the seller and buyer,then there is

-In the figure above,if the market is at equilibrium,the sum of the total consumer surplus and the total producer surplus is

Explain how the invisible hand delivers an efficient market outcome.

-In the above figure,what is the marginal cost of the 4th pizza?

The fair results approach to fairness

Overproduction results in

-The figure above shows the market for hot dogs. a.What is the maximum price consumers are willing to pay for the 25th hot dog? b.What is the efficient quantity? c.Suppose that the production was limited to 25 hot dogs.In the figure,indicate the amount of the deadweight loss.

-The figure above shows Lauren's demand curve for Barbie dolls and the market price for Barbie dolls.Using the area of the consumer surplus triangle,Lauren's total consumer surplus from purchasing 3 dolls is

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's consumer surplus from her 10th soda is

All points on the production possibilities frontier

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

When technology increases the supply of a good and lower prices increase the quantity demanded,

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

"If there is an inefficient level of nursing care in South America,a deadweight loss exists." Is this statement true or false?

What is producer surplus?

Canned milk was only rationed to babies and small children during World War 2.This rationing was an example of allocation by

The idea of the "big tradeoff" points out the costs of

The figure above shows the supply curve for pizza and the market price of pizza. -In the figure above,the producer surplus is

In a figure,the consumer surplus is equal to the area ________ the ________ curve and ________ the price.

The point that each glass of lemonade consumed on a hot day brings lower and lower levels of satisfaction is known as the principle of

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

In a figure,the consumer surplus is equal to the area the curve and the price.