Question 1

The difference between the marginal benefit from a new pair of shoes and the price of the new pair of shoes is

Accepted Answer

A)  the consumer surplus from that pair of shoes. 
B)  what we get. 
C)  what we have to pay. 
D)  the price when the marginal benefit is maximized. 
E)  the consumer's expenditure on the shoes. 
A)  the consumer surplus from that pair of shoes. 
B)  what we get. 
C)  what we have to pay. 
D)  the price when the marginal benefit is maximized. 
E)  the consumer's expenditure on the shoes.

Question 2

-The figure above shows the supply curve for pizzas.
a.What is the marginal cost of the 20th pizza?
b.What is the minimum supply price of the 20th pizza?
c.If the price is $6 per pizza,what is the producer surplus on the 20th pizza?
d.If the price is $6 per pizza,what is the producer surplus for the total quantity of pizzas produced?
e.If the price is $8 per pizza,what is the producer surplus for the total quantity of pizzas produced?
f.If the price is $10 per pizza,what is the producer surplus for the total quantity of pizzas produced?

Accepted Answer

a.The marginal cost of the 20th pizza is

Question 3

The idea that unequal incomes is unfair generally uses the ________ principle of fairness.

Accepted Answer

A)  big tradeoff 
B)  involuntary exchange 
C)  voluntary exchange 
D)  it's not fair if the result isn't fair 
E)  it's not fair if the rules aren't fair 
A)  big tradeoff 
B)  involuntary exchange 
C)  voluntary exchange 
D)  it's not fair if the result isn't fair 
E)  it's not fair if the rules aren't fair

Question 4

The producer surplus on a unit of a good is

Accepted Answer

A)  equal to the marginal benefit from the good minus its price. 
B)  equal to the price of the good minus the marginal cost of producing it. 
C)  always equal to consumer surplus. 
D)  Both answers A and C are correct. 
E)  Both answers B and C are correct. 
A)  equal to the marginal benefit from the good minus its price. 
B)  equal to the price of the good minus the marginal cost of producing it. 
C)  always equal to consumer surplus. 
D)  Both answers A and C are correct. 
E)  Both answers B and C are correct.

Question 5

What is consumer surplus?

Accepted Answer

Consumer surplus equals the difference b

Question 6

We allocate resources efficiently when

Accepted Answer

A)  marginal benefit is equal to marginal cost. 
B)  marginal benefit is greater than marginal cost by any amount. 
C)  marginal cost is greater than marginal benefit. 
D)  total benefit is greater than total cost. 
E)  marginal benefit is greater than marginal cost by as much as possible. 
A)  marginal benefit is equal to marginal cost. 
B)  marginal benefit is greater than marginal cost by any amount. 
C)  marginal cost is greater than marginal benefit. 
D)  total benefit is greater than total cost. 
E)  marginal benefit is greater than marginal cost by as much as possible.

Question 7

-In the figure above,the total benefit from pizza is ________ per day.

Accepted Answer

A)  $100,000 
B)  $50,000 
C)  $125,000 
D)  $150,000 
E)  None of the above answers is correct. 
A)  $100,000 
B)  $50,000 
C)  $125,000 
D)  $150,000 
E)  None of the above answers is correct.

Question 8

Jason needs help getting ready for the next test in his economics course and would like to hire Maria,an economics tutor to help him.Jason is willing to pay $30 for the first hour of tutoring,$25 for the second,$20 for the third,$15 for the fourth,and $10 for the fifth.The equilibrium price for tutoring is $15 per hour.For how many hours of tutoring will Jason hire Maria? Why this amount of hours? What is Jason's consumer surplus,if any,from the tutoring? What is Maria's consumer surplus from the tutoring?

Accepted Answer

Jason will hire Maria for 4 hours of tut

Question 9

What is the impact of a government subsidy to producers?

Accepted Answer

A)  Less is produced relative to the efficient level, creating a deadweight loss. 
B)  More is produced relative to the efficient level, creating a deadweight loss. 
C)  Producer surplus is increased, which creates a larger consumer surplus. 
D)  Producers are able to sell the product at a higher price. 
E)  Consumers must pay a higher price for the good. 
A)  Less is produced relative to the efficient level, creating a deadweight loss. 
B)  More is produced relative to the efficient level, creating a deadweight loss. 
C)  Producer surplus is increased, which creates a larger consumer surplus. 
D)  Producers are able to sell the product at a higher price. 
E)  Consumers must pay a higher price for the good.

Question 10

The opportunity cost of producing one more unit of a good or service is the

Accepted Answer

A)  marginal cost. 
B)  marginal benefit. 
C)  efficient level of production. 
D)  market outcome. 
E)  price of the good or service. 
A)  marginal cost. 
B)  marginal benefit. 
C)  efficient level of production. 
D)  market outcome. 
E)  price of the good or service.

Question 11

At the market equilibrium,when efficiency is attained,the marginal benefit ________ the marginal cost.

Accepted Answer

A)  is equal to 
B)  is greater than 
C)  is less than 
D)  has no necessary relationship with 
E)  is equal to the marginal deadweight loss which is equal to 
A)  is equal to 
B)  is greater than 
C)  is less than 
D)  has no necessary relationship with 
E)  is equal to the marginal deadweight loss which is equal to

Question 12

Which of the following leads to a deadweight loss?
i.overproduction
ii.underproduction
iii.taxes
iv.monopoly

Accepted Answer

A)  ii only 
B)  iii and iv 
C)  i and ii 
D)  i, ii, iii, and iv 
E)  i, ii, and iii 
A)  ii only 
B)  iii and iv 
C)  i and ii 
D)  i, ii, iii, and iv 
E)  i, ii, and iii

Question 13

Which of the following statements is correct?
i.The demand curve shows the maximum price people are willing to pay for a given quantity of the good.
ii.The maximum price a consumer is willing to pay for an additional unit is the marginal benefit of that unit.
iii.Value is what a consumer receives and price is what a consumer pays.

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii 
A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii

Question 14

Maria helps tutor students taking economics.The equilibrium price for tutoring is $15 per hour.Maria has determined her opportunity cost per hour to be $6 for the first,$9 for the second,$12 for the third,$15 for the fourth,and $18 for the fifth.How many hours will Maria tutor? Why this amount of hours? What,if any,is Maria's producer surplus?

Accepted Answer

Maria will tutor for 4 hours.For all of

Question 15

-In the figure above,when 4,000 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 16

Often politicians assert that a price,such as the price of gasoline or the rent for an apartment,is too high and that it is unfair for these prices to be so high.If these products are traded in competitive markets,what fairness rule are politicians using? Why?

Accepted Answer

The fairness rule is one of "It's not fa

Question 17

Why does the marginal benefit curve have a negative slope?

Accepted Answer

Each successive increase in the consumpt

Question 18

A supply curve shows quantities supplied at various prices.It also shows the

Accepted Answer

A)  total profit the firm earns at a given level of output. 
B)  marginal benefit of the good. 
C)  total cost of production. 
D)  marginal cost of production. 
E)  producer surplus, which is equal to the slope of the supply curve. 
A)  total profit the firm earns at a given level of output. 
B)  marginal benefit of the good. 
C)  total cost of production. 
D)  marginal cost of production. 
E)  producer surplus, which is equal to the slope of the supply curve.

Question 19

-The figure shows the demand curve for hotel rooms at a local resort.
a.If the hotel charges $120 per night,how many rooms will they rent?
b.If there are only 40 rooms available,how much are customers willing to pay for a room?
c.If 60 rooms are available,how much are customers willing to pay?
d.What do the dollars in your answer to part (c)represent?

Accepted Answer

a.At $120 a night,the hotel will rent 20

Question 20

If you are willing to pay no more than $4 for a slice of pizza and the price of a slice of pizza is $4,then

Accepted Answer

A)  if you buy it, you would be cheated because you would realize no total benefit from the purchase. 
B)  you buy it but you get no marginal benefit from the purchase. 
C)  you will not buy it. 
D)  you buy it but you get no consumer surplus from the purchase. 
E)  you might buy it depending on how the slice's marginal benefit compares to its price. 
A)  if you buy it, you would be cheated because you would realize no total benefit from the purchase. 
B)  you buy it but you get no marginal benefit from the purchase. 
C)  you will not buy it. 
D)  you buy it but you get no consumer surplus from the purchase. 
E)  you might buy it depending on how the slice's marginal benefit compares to its price.

The difference between the marginal benefit from a new pair of shoes and the price of the new pair of shoes is

The idea that unequal incomes is unfair generally uses the ________ principle of fairness.

The producer surplus on a unit of a good is

What is consumer surplus?

We allocate resources efficiently when

-In the figure above,the total benefit from pizza is ________ per day.

What is the impact of a government subsidy to producers?

The opportunity cost of producing one more unit of a good or service is the

At the market equilibrium,when efficiency is attained,the marginal benefit ________ the marginal cost.

Which of the following leads to a deadweight loss? i.overproduction ii.underproduction iii.taxes iv.monopoly

-In the figure above,when 4,000 pizzas are produced,the marginal benefit of a pizza its marginal cost,which means pizza is being produced.

Often politicians assert that a price,such as the price of gasoline or the rent for an apartment,is too high and that it is unfair for these prices to be so high.If these products are traded in competitive markets,what fairness rule are politicians using? Why?

Why does the marginal benefit curve have a negative slope?

A supply curve shows quantities supplied at various prices.It also shows the

If you are willing to pay no more than $4 for a slice of pizza and the price of a slice of pizza is $4,then

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 difference between the marginal benefit from a new pair of shoes and the price of the new pair of shoes is

The idea that unequal incomes is unfair generally uses the ________ principle of fairness.

The producer surplus on a unit of a good is

What is consumer surplus?

We allocate resources efficiently when

-In the figure above,the total benefit from pizza is ________ per day.

What is the impact of a government subsidy to producers?

The opportunity cost of producing one more unit of a good or service is the

At the market equilibrium,when efficiency is attained,the marginal benefit ________ the marginal cost.

Which of the following leads to a deadweight loss? i.overproduction ii.underproduction iii.taxes iv.monopoly

-In the figure above,when 4,000 pizzas are produced,the marginal benefit of a pizza ________ its marginal cost,which means ________ pizza is being produced.

Often politicians assert that a price,such as the price of gasoline or the rent for an apartment,is too high and that it is unfair for these prices to be so high.If these products are traded in competitive markets,what fairness rule are politicians using? Why?

Why does the marginal benefit curve have a negative slope?

A supply curve shows quantities supplied at various prices.It also shows the

If you are willing to pay no more than $4 for a slice of pizza and the price of a slice of pizza is $4,then

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 the figure above,when 4,000 pizzas are produced,the marginal benefit of a pizza its marginal cost,which means pizza is being produced.