Question 1

When a society achieves allocative efficiency,it

Accepted Answer

A)  is not achieving production efficiency. 
B)  is producing that combination of goods and services that society values most highly. 
C)  might or it might not be producing at a point on society's PPF. 
D)  is producing a combination of goods and services whose marginal cost exceeds their marginal benefit. 
E)  is producing the combination of goods and services for which marginal benefit exceeds marginal cost by as much as possible. 
A)  is not achieving production efficiency. 
B)  is producing that combination of goods and services that society values most highly. 
C)  might or it might not be producing at a point on society's PPF. 
D)  is producing a combination of goods and services whose marginal cost exceeds their marginal benefit. 
E)  is producing the combination of goods and services for which marginal benefit exceeds marginal cost by as much as possible.

Question 2

Draw and describe a marginal benefit curve for slices of pizza where the opportunity cost of consuming a slice of pizza is a taco.

Accepted Answer

@#IMG-DLM& A marginal benefit curve is drawn as a

Question 3

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's consumer surplus from her 15th 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 4

Which of the following is true for taxes? They

Accepted Answer

A)  are always administered fairly. 
B)  are a necessary part of living in an economy with a fair distribution of income. 
C)  are always administered without creating unfairness or inefficiency. 
D)  are an involuntary transfer of private property. 
E)  do not create a big tradeoff problem. 
A)  are always administered fairly. 
B)  are a necessary part of living in an economy with a fair distribution of income. 
C)  are always administered without creating unfairness or inefficiency. 
D)  are an involuntary transfer of private property. 
E)  do not create a big tradeoff problem.

Question 5

Which of the following is an example in which "the big tradeoff" can occur?

Accepted Answer

A)  The government redistributes income from the rich to the poor. 
B)  Ford increases the price of a pickup truck. 
C)  A basketball player signs a $5 million contract. 
D)  A college lowers tuition. 
E)  The price of personal computers falls year after year. 
A)  The government redistributes income from the rich to the poor. 
B)  Ford increases the price of a pickup truck. 
C)  A basketball player signs a $5 million contract. 
D)  A college lowers tuition. 
E)  The price of personal computers falls year after year.

Question 6

A supply curve shows the marginal

Accepted Answer

A)  benefit consumers receive from consuming a good. 
B)  profit businesses earn from selling a good. 
C)  cost of producing the good. 
D)  price paid for a good. 
E)  benefit sellers receive from selling a good. 
A)  benefit consumers receive from consuming a good. 
B)  profit businesses earn from selling a good. 
C)  cost of producing the good. 
D)  price paid for a good. 
E)  benefit sellers receive from selling a good.

Question 7

Why do societies face a tradeoff between the size of the economic pie and the degree of equality with which it is shared?

Accepted Answer

A person's share of the economic pie is

Question 8

-The figure above shows the market for brooms.If the market is efficient,

Accepted Answer

A)  0 brooms are produced. 
B)  600 brooms are produced. 
C)  more than 1000 brooms are produced. 
D)  between 0 and 600 brooms are produced. 
E)  between 600 and 1000 brooms are produced. 
A)  0 brooms are produced. 
B)  600 brooms are produced. 
C)  more than 1000 brooms are produced. 
D)  between 0 and 600 brooms are produced. 
E)  between 600 and 1000 brooms are produced.

Question 9

Which of the following describes the economic meanings of cost and price?

Accepted Answer

A)  Cost is exchange worth, and price is dollar worth. 
B)  Cost is what must be given up to produce a good, and price is what a seller receives when the good is sold. 
C)  They are the same, and both mean what is received when a good is sold. 
D)  Cost refers to what the buyers pay for the good, and price refers to what sellers receive when the good is sold. 
E)  Cost refers to the price that buyers must pay to buy the good. 
A)  Cost is exchange worth, and price is dollar worth. 
B)  Cost is what must be given up to produce a good, and price is what a seller receives when the good is sold. 
C)  They are the same, and both mean what is received when a good is sold. 
D)  Cost refers to what the buyers pay for the good, and price refers to what sellers receive when the good is sold. 
E)  Cost refers to the price that buyers must pay to buy the good.

Question 10

What must be true for a consumer to buy a good or service?

Accepted Answer

A)  The price must be equal to or less than the marginal benefit. 
B)  The total benefit received must equal the total spent to buy the good or service. 
C)  The consumer must be able to obtain some consumer surplus. 
D)  The consumer must not be able to produce the product. 
E)  The price must be equal to or greater than the marginal benefit. 
A)  The price must be equal to or less than the marginal benefit. 
B)  The total benefit received must equal the total spent to buy the good or service. 
C)  The consumer must be able to obtain some consumer surplus. 
D)  The consumer must not be able to produce the product. 
E)  The price must be equal to or greater than the marginal benefit.

Question 11

If you split your dessert with your date,you are using a ________ allocation method.

Accepted Answer

A)  first-come, first-served 
B)  sharing equally 
C)  contest 
D)  personal characteristics 
E)  command 
A)  first-come, first-served 
B)  sharing equally 
C)  contest 
D)  personal characteristics 
E)  command

Question 12

When the price rises and the supply curve does not shift,the firms' producer surplus ________.When the price falls and the supply curve does not shift,the firms' producer surplus ________.

Accepted Answer

A)  increases; decreases 
B)  decreases; increases 
C)  decreases; decreases 
D)  increases; increases 
E)  does not change; does not change 
A)  increases; decreases 
B)  decreases; increases 
C)  decreases; decreases 
D)  increases; increases 
E)  does not change; does not change

Question 13

"A demand curve is the same as a marginal cost curve." Is this statement correct or incorrect? Explain your answer.

Accepted Answer

The statement is incorrect.A demand curv

Question 14

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The producer surplus from the 10,000th soda is

Accepted Answer

A)  $0.00. 
B)  $0.50. 
C)  $1.00. 
D)  more than $1.00. 
E)  None of the above answers is correct. 
A)  $0.00. 
B)  $0.50. 
C)  $1.00. 
D)  more than $1.00. 
E)  None of the above answers is correct.

Question 15

What allocation method is the primary method used in the United States?

Accepted Answer

While all the different allocation metho

Question 16

When production moves from the efficient quantity to a point of overproduction,

Accepted Answer

A)  consumer surplus definitely increases. 
B)  the sum of producer surplus and consumer surplus increases. 
C)  there is a deadweight loss. 
D)  consumers definitely lose and producers definitely gain. 
E)  consumers definitely gain and producers definitely lose. 
A)  consumer surplus definitely increases. 
B)  the sum of producer surplus and consumer surplus increases. 
C)  there is a deadweight loss. 
D)  consumers definitely lose and producers definitely gain. 
E)  consumers definitely gain and producers definitely lose.

Question 17

"Allocative efficiency in the production of cherries means that consumers can eat all of the cherries they desire." Is this statement true or false?

Accepted Answer

Allocative efficiency means that we are

Question 18

Allocative efficiency is achieved when the marginal benefit of a good

Accepted Answer

A)  exceeds the marginal cost regardless of how much the difference is. 
B)  is less than its marginal cost. 
C)  is equal to its marginal cost. 
D)  equals zero. 
E)  exceeds the marginal cost by as much as possible. 
A)  exceeds the marginal cost regardless of how much the difference is. 
B)  is less than its marginal cost. 
C)  is equal to its marginal cost. 
D)  equals zero. 
E)  exceeds the marginal cost by as much as possible.

Question 19

-The figure above shows the market for pants.If the government subsidizes the production of pants so that production expands from 6 million pairs to 7 million pairs,

Accepted Answer

A)  there would be no deadweight loss. 
B)  the government's policy would have no effect on the sum of consumer surplus and producer surplus. 
C)  a deadweight loss would result. 
D)  the government's policy would increase the sum of consumer surplus and producer surplus. 
E)  production would be even more efficient than if 6 million pairs of pants are produced because more is always better than less. 
A)  there would be no deadweight loss. 
B)  the government's policy would have no effect on the sum of consumer surplus and producer surplus. 
C)  a deadweight loss would result. 
D)  the government's policy would increase the sum of consumer surplus and producer surplus. 
E)  production would be even more efficient than if 6 million pairs of pants are produced because more is always better than less.

Question 20

Consumers' total benefit from consuming a good is equal to the

Accepted Answer

A)  total amount spent on the good. 
B)  consumer surplus on the quantity purchased. 
C)  consumer surplus plus the total amount spent on the good. 
D)  consumer surplus minus the total amount spent on the good. 
E)  total amount spent on the good divided by the number of units purchased. 
A)  total amount spent on the good. 
B)  consumer surplus on the quantity purchased. 
C)  consumer surplus plus the total amount spent on the good. 
D)  consumer surplus minus the total amount spent on the good. 
E)  total amount spent on the good divided by the number of units purchased.

When a society achieves allocative efficiency,it

Draw and describe a marginal benefit curve for slices of pizza where the opportunity cost of consuming a slice of pizza is a taco.

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's consumer surplus from her 15th soda is

Which of the following is true for taxes? They

Which of the following is an example in which "the big tradeoff" can occur?

A supply curve shows the marginal

Why do societies face a tradeoff between the size of the economic pie and the degree of equality with which it is shared?

-The figure above shows the market for brooms.If the market is efficient,

Which of the following describes the economic meanings of cost and price?

What must be true for a consumer to buy a good or service?

If you split your dessert with your date,you are using a ________ allocation method.

When the price rises and the supply curve does not shift,the firms' producer surplus .When the price falls and the supply curve does not shift,the firms' producer surplus .

"A demand curve is the same as a marginal cost curve." Is this statement correct or incorrect? Explain your answer.

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The producer surplus from the 10,000th soda is

What allocation method is the primary method used in the United States?

When production moves from the efficient quantity to a point of overproduction,

"Allocative efficiency in the production of cherries means that consumers can eat all of the cherries they desire." Is this statement true or false?

Allocative efficiency is achieved when the marginal benefit of a good

-The figure above shows the market for pants.If the government subsidizes the production of pants so that production expands from 6 million pairs to 7 million pairs,

Consumers' total benefit from consuming a good is equal to the

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 a society achieves allocative efficiency,it

Draw and describe a marginal benefit curve for slices of pizza where the opportunity cost of consuming a slice of pizza is a taco.

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's consumer surplus from her 15th soda is

Which of the following is true for taxes? They

Which of the following is an example in which "the big tradeoff" can occur?

A supply curve shows the marginal

Why do societies face a tradeoff between the size of the economic pie and the degree of equality with which it is shared?

-The figure above shows the market for brooms.If the market is efficient,

Which of the following describes the economic meanings of cost and price?

What must be true for a consumer to buy a good or service?

If you split your dessert with your date,you are using a ________ allocation method.

When the price rises and the supply curve does not shift,the firms' producer surplus ________.When the price falls and the supply curve does not shift,the firms' producer surplus ________.

"A demand curve is the same as a marginal cost curve." Is this statement correct or incorrect? Explain your answer.

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The producer surplus from the 10,000th soda is

What allocation method is the primary method used in the United States?

When production moves from the efficient quantity to a point of overproduction,

"Allocative efficiency in the production of cherries means that consumers can eat all of the cherries they desire." Is this statement true or false?

Allocative efficiency is achieved when the marginal benefit of a good

-The figure above shows the market for pants.If the government subsidizes the production of pants so that production expands from 6 million pairs to 7 million pairs,

Consumers' total benefit from consuming a good is equal to the

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

When the price rises and the supply curve does not shift,the firms' producer surplus .When the price falls and the supply curve does not shift,the firms' producer surplus .