Question 1

The total consumer surplus enjoyed by all consumers in a market

Accepted Answer

A) exceeds the market price 
B) is measured by the area under the market demand curve 
C) is measured by the area beneath the market price 
D) is a Pareto improvement 
E) is called market consumer surplus 
A) exceeds the market price 
B) is measured by the area under the market demand curve 
C) is measured by the area beneath the market price 
D) is a Pareto improvement 
E) is called market consumer surplus

Question 2

The efficient quantity of a good

Accepted Answer

A) is achieved whenever the marginal cost of producing the last unit exceeds its value to some consumer 
B) is achieved whenever the value of the last unit to some consumer exceeds the minimum price its producer would be willing to accept for it 
C) will not be produced unless a side payment is made 
D) is the quantity at which the market supply and demand curves intersect 
E) is usually a fair quantity 
A) is achieved whenever the marginal cost of producing the last unit exceeds its value to some consumer 
B) is achieved whenever the value of the last unit to some consumer exceeds the minimum price its producer would be willing to accept for it 
C) will not be produced unless a side payment is made 
D) is the quantity at which the market supply and demand curves intersect 
E) is usually a fair quantity

Question 3

-In Figure 14-1 which area represents producer surplus?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
E) E 
A) A 
B) B 
C) C 
D) D 
E) E

Question 4

Economic efficiency is achieved

Accepted Answer

A) automatically in a capitalist economy 
B) when every possible Pareto improvement is exploited 
C) when all markets are monopolized 
D) if income is fairly distributed 
E) whenever a voluntary transaction takes place 
A) automatically in a capitalist economy 
B) when every possible Pareto improvement is exploited 
C) when all markets are monopolized 
D) if income is fairly distributed 
E) whenever a voluntary transaction takes place

Question 5

Tax shifting

Accepted Answer

A) is the process by which buyers pass a tax onto sellers 
B) is the process that causes some of a tax collected by one side of a market to be paid by the other side 
C) is the process of avoiding taxes and lowering a tax burden 
D) is a way of avoiding payment of a tax 
E) is illegal in the United States 
A) is the process by which buyers pass a tax onto sellers 
B) is the process that causes some of a tax collected by one side of a market to be paid by the other side 
C) is the process of avoiding taxes and lowering a tax burden 
D) is a way of avoiding payment of a tax 
E) is illegal in the United States

Question 6

A Pareto improvement is any action that makes at least one individual better off,and harms no one.

Accepted Answer

A) True 
 B)False

Question 7

A perfectly competitive market usually achieves economic efficiency because

Accepted Answer

A) there are no barriers to entry 
B) there are no barriers to entry and all of the goods are perfect substitutes 
C) each of the firms in the industry are profit maximizers 
D) it is the most fair 
E) most buyers in the market have the same level of income 
A) there are no barriers to entry 
B) there are no barriers to entry and all of the goods are perfect substitutes 
C) each of the firms in the industry are profit maximizers 
D) it is the most fair 
E) most buyers in the market have the same level of income

Question 8

Pareto improvements that require the use of side payments typically are easy to coordinate and tend to enhance economic efficiency.

Accepted Answer

A) True 
 B)False

Question 9

The height of the market demand curve

Accepted Answer

A) at any quantity shows the value - to someone - of the last unit of the good consumed 
B) shows the market value of a good or service 
C) increases as more of a good or service is consumed 
D) shows the cost of producing each unit of a good or service 
E) measures the side payment necessary to achieve economic efficiency 
A) at any quantity shows the value - to someone - of the last unit of the good consumed 
B) shows the market value of a good or service 
C) increases as more of a good or service is consumed 
D) shows the cost of producing each unit of a good or service 
E) measures the side payment necessary to achieve economic efficiency

Question 10

Market consumer surplus at any quantity -- measured in dollars -- is the area above the market demand curve and below the market price.

Accepted Answer

A) True 
 B)False

Question 11

An individual seller's producer surplus on a unit of a good is

Accepted Answer

A) zero in perfect competition 
B) zero in monopoly 
C) greater than the buyer's consumer surplus on that unit 
D) an example of a side payment 
E) the difference between the price the seller receives and the cost of producing that unit. 
A) zero in perfect competition 
B) zero in monopoly 
C) greater than the buyer's consumer surplus on that unit 
D) an example of a side payment 
E) the difference between the price the seller receives and the cost of producing that unit.

Question 12

A price ceiling in a perfectly competitive market

Accepted Answer

A) leads to the same result as if the market were monopolized 
B) results in a welfare loss 
C) is effective only if it is set above the equilibrium price 
D) may result from collusion among the firms selling in that market 
E) may result from collusion among the consumers buying in that market 
A) leads to the same result as if the market were monopolized 
B) results in a welfare loss 
C) is effective only if it is set above the equilibrium price 
D) may result from collusion among the firms selling in that market 
E) may result from collusion among the consumers buying in that market

Question 13

A Pareto improvement is any action that makes everyone better off.

Accepted Answer

A) True 
 B)False

Question 14

The more elastic the demand for a good,

Accepted Answer

A) the more of an excise tax is that is collected by sellers 
B) the more of an excise tax that is paid by buyers 
C) the more an excise that is paid by sellers 
D) the more elastic the supply of that good 
E) the smaller the burden of a tax on that good 
A) the more of an excise tax is that is collected by sellers 
B) the more of an excise tax that is paid by buyers 
C) the more an excise that is paid by sellers 
D) the more elastic the supply of that good 
E) the smaller the burden of a tax on that good

Question 15

Suppose that a perfectly competitive market is in equilibrium.Then,

Accepted Answer

A) the equilibrium quantity provides the maximum possible benefit to buyers 
B) the equilibrium quantity provides the maximum possible benefit to buyers and sellers combined 
C) total (producer + consumer)surplus is equal to price x quantity. 
D) an additional unit,if produced,would produce a benefit that exceeds its cost of production 
E) an additional unit could be produced at a cost to some producer that is less than the benefit to some consumer 
A) the equilibrium quantity provides the maximum possible benefit to buyers 
B) the equilibrium quantity provides the maximum possible benefit to buyers and sellers combined 
C) total (producer + consumer)surplus is equal to price x quantity. 
D) an additional unit,if produced,would produce a benefit that exceeds its cost of production 
E) an additional unit could be produced at a cost to some producer that is less than the benefit to some consumer

Question 16

Economic efficiency

Accepted Answer

A) is guaranteed in perfectly competitive and monopolistically competitive markets 
B) is achieved in any market where firms are free to maximize profits 
C) leads to a fair distribution of income 
D) leads to a fair distribution of goods 
E) is most likely to be achieved in perfectly competitive markets 
A) is guaranteed in perfectly competitive and monopolistically competitive markets 
B) is achieved in any market where firms are free to maximize profits 
C) leads to a fair distribution of income 
D) leads to a fair distribution of goods 
E) is most likely to be achieved in perfectly competitive markets

Question 17

Consider a market with a price ceiling.If the price ceiling is raised which of the following would happen?

Accepted Answer

A) The consumer surplus would increase,the producer surplus would decrease and the dead weight loss would decrease 
B) The consumer surplus would increase,the producer surplus would decrease and the dead weight loss would increase 
C) The consumer surplus,the producer surplus and the dead weight loss would all decrease 
D) The consumer surplus,the producer surplus and the dead weight loss would all increase 
E) The consumer surplus would decrease,the producer surplus would increase and the dead weight loss would decrease 
A) The consumer surplus would increase,the producer surplus would decrease and the dead weight loss would decrease 
B) The consumer surplus would increase,the producer surplus would decrease and the dead weight loss would increase 
C) The consumer surplus,the producer surplus and the dead weight loss would all decrease 
D) The consumer surplus,the producer surplus and the dead weight loss would all increase 
E) The consumer surplus would decrease,the producer surplus would increase and the dead weight loss would decrease

Question 18

If 10 units of a good are sold at a market price of $40 each,then

Accepted Answer

A) the value to some individual of the tenth unit of output is $40 
B) the economy is efficient 
C) selling an 11th unit would be a Pareto improvement 
D) a side payment of $40 is needed to ensure that the good is produced 
E) the market must be perfectly competitive 
A) the value to some individual of the tenth unit of output is $40 
B) the economy is efficient 
C) selling an 11th unit would be a Pareto improvement 
D) a side payment of $40 is needed to ensure that the good is produced 
E) the market must be perfectly competitive

Question 19

Of the four major market structures,oligopoly is the worst at achieving economic efficiency.

Accepted Answer

A) True 
 B)False

Question 20

Economic efficiency requires that Pareto improvements still be possible.

Accepted Answer

A) True 
 B)False

The total consumer surplus enjoyed by all consumers in a market

The efficient quantity of a good

-In Figure 14-1 which area represents producer surplus?

Economic efficiency is achieved

Tax shifting

A Pareto improvement is any action that makes at least one individual better off,and harms no one.

A perfectly competitive market usually achieves economic efficiency because

Pareto improvements that require the use of side payments typically are easy to coordinate and tend to enhance economic efficiency.

The height of the market demand curve

Market consumer surplus at any quantity -- measured in dollars -- is the area above the market demand curve and below the market price.

An individual seller's producer surplus on a unit of a good is

A price ceiling in a perfectly competitive market

A Pareto improvement is any action that makes everyone better off.

The more elastic the demand for a good,

Suppose that a perfectly competitive market is in equilibrium.Then,

Economic efficiency

Consider a market with a price ceiling.If the price ceiling is raised which of the following would happen?

If 10 units of a good are sold at a market price of $40 each,then

Of the four major market structures,oligopoly is the worst at achieving economic efficiency.

Economic efficiency requires that Pareto improvements still be possible.

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters

Exam 15: Economic Efficiency and the Competitive Ideal

The total consumer surplus enjoyed by all consumers in a market

The efficient quantity of a good

-In Figure 14-1 which area represents producer surplus?

Economic efficiency is achieved

Tax shifting

A Pareto improvement is any action that makes at least one individual better off,and harms no one.

A perfectly competitive market usually achieves economic efficiency because

Pareto improvements that require the use of side payments typically are easy to coordinate and tend to enhance economic efficiency.

The height of the market demand curve

Market consumer surplus at any quantity -- measured in dollars -- is the area above the market demand curve and below the market price.

An individual seller's producer surplus on a unit of a good is

A price ceiling in a perfectly competitive market

A Pareto improvement is any action that makes everyone better off.

The more elastic the demand for a good,

Suppose that a perfectly competitive market is in equilibrium.Then,

Economic efficiency

Consider a market with a price ceiling.If the price ceiling is raised which of the following would happen?

If 10 units of a good are sold at a market price of $40 each,then

Of the four major market structures,oligopoly is the worst at achieving economic efficiency.

Economic efficiency requires that Pareto improvements still be possible.

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters