Question 1

Why does the marginal benefit curve have a negative slope?

Accepted Answer

Each successive increase in the consumpt

Question 2

-In the above figure, the market is at its equilibrium.Area B is equal to

Accepted Answer

A) consumer surplus. 
B) total revenue. 
C) marginal benefit. 
D) producer surplus. 
E) total surplus. 
A) consumer surplus. 
B) total revenue. 
C) marginal benefit. 
D) producer surplus. 
E) total surplus.

Question 3

-The table above shows the production possibilities for an economy.When the economy produces a combination of 900 books and 50 loaves of bread,

Accepted Answer

A) production efficiency occurs because resources are not overused. 
B) allocative efficiency is achieved because both goods are produced. 
C) production efficiency is not achieved. 
D) allocative and production efficiency are both achieved. 
E) production efficiency is not achieved but allocative efficiency might be achieved. 
A) production efficiency occurs because resources are not overused. 
B) allocative efficiency is achieved because both goods are produced. 
C) production efficiency is not achieved. 
D) allocative and production efficiency are both achieved. 
E) production efficiency is not achieved but allocative efficiency might be achieved.

Question 4

-The figure above shows a nation's production possibilities frontier.If the marginal cost equals the marginal benefit at point A when 4 million pizzas are produced,

Accepted Answer

A) allocative efficiency is achieved but production efficiency is not achieved because there are no tacos being produced. 
B) both allocative and production efficiency are achieved. 
C) production efficiency is achieved but allocative efficiency is not achieved because there are no tacos being produced. 
D) production efficiency is achieved but allocative efficiency is not achieved because the number of tacos produced is at its absolute maximum. 
E) neither allocative nor production efficiency has been achieved. 
A) allocative efficiency is achieved but production efficiency is not achieved because there are no tacos being produced. 
B) both allocative and production efficiency are achieved. 
C) production efficiency is achieved but allocative efficiency is not achieved because there are no tacos being produced. 
D) production efficiency is achieved but allocative efficiency is not achieved because the number of tacos produced is at its absolute maximum. 
E) neither allocative nor production efficiency has been achieved.

Question 5

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 6

Bill Gates is a founder of Microsoft and the world's richest individual.Suppose Microsoft sells more software and Mr.Gates acquires another billion dollars in wealth.Simultaneously, suppose a burglar whose income is well below average broke into Bill Gates' house and stole a million dollars' worth of antiques.Using the "it's not fair if the rules aren't fair" approach to fairness, is Mr.Gates' acquisition of additional wealth fair? Is the (poor)thief's acquisition fair?

Accepted Answer

In order for Mr.Gates to become richer,

Question 7

Compare and contrast production efficiency and allocative efficiency.

Accepted Answer

Production efficiency means that we are

Question 8

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 9

-In the figure above, suppose that $20 is the market equilibrium price.What is the amount of the consumer surplus?

Accepted Answer

A) $3,375 
B) $3,000 
C) $375 
D) 150 units 
E) $1,500 
A) $3,375 
B) $3,000 
C) $375 
D) 150 units 
E) $1,500

Question 10

The marginal benefit of the first hotdog consumed is ________ the marginal benefit of the fifth hotdog consumed.

Accepted Answer

A) equal to 
B) less than 
C) greater than 
D) the inverse of 
E) equal to 5 times 
A) equal to 
B) less than 
C) greater than 
D) the inverse of 
E) equal to 5 times

Question 11

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The producer surplus from the 20,000th 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 12

-The figure above shows the demand curve for pizza.
a∙What is the marginal benefit of the 20th pizza?
b∙What is the maximum price the consumer is willing to pay for the 20th pizza?
c∙If the price of a pizza is $6, what is the consumer surplus of the 20th pizza?
d∙ If the price of a pizza is $10, what is the consumer surplus on all the pizzas consumed?
e∙If the price of a pizza is $6, what is the consumer surplus on all the pizzas consumed?

Accepted Answer

a∙The marginal benefit of the 20th pizza

Question 13

-In the figure above, the cost of producing 10,000 pizzas a day 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 14

-In the figure above, suppose the market is at equilibrium.Then area A is the

Accepted Answer

A) marginal benefit. 
B) marginal cost. 
C) amount of the consumer surplus. 
D) amount of the producer surplus. 
E) deadweight loss. 
A) marginal benefit. 
B) marginal cost. 
C) amount of the consumer surplus. 
D) amount of the producer surplus. 
E) deadweight loss.

Question 15

Which of the following is a correct description of the supply curve?
I∙The supply curve is also the marginal cost curve.
Ii∙The supply curve shows the dollars' worth of other goods that we must sacrifice to produce another unit of a good.
Iii∙The supply curve shows the additional cost of producing another unit of a good.

Accepted Answer

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

Question 16

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 17

Deadweight loss and market failure is created when a market produces

Accepted Answer

A) either more or less than the efficient quantity. 
B) more than the efficient quantity but not when less than the efficient quantity is produced. 
C) less than the efficient quantity but not when more than the efficient quantity is produced. 
D) the efficient quantity. 
E) None of the above answers is correct because deadweight loss has nothing to do with the efficient quantity. 
A) either more or less than the efficient quantity. 
B) more than the efficient quantity but not when less than the efficient quantity is produced. 
C) less than the efficient quantity but not when more than the efficient quantity is produced. 
D) the efficient quantity. 
E) None of the above answers is correct because deadweight loss has nothing to do with the efficient quantity.

Question 18

-In the figure above, what is the consumer surplus per day?

Accepted Answer

A) $100,000 
B) $50,000 
C) $125,000 
D) $150,000 
E) zero 
A) $100,000 
B) $50,000 
C) $125,000 
D) $150,000 
E) zero

Question 19

To an economist, "value" is the same as

Accepted Answer

A) marginal cost. 
B) consumer surplus. 
C) the minimum price that people are willing to pay for another unit of the good. 
D) marginal benefit. 
E) total surplus. 
A) marginal cost. 
B) consumer surplus. 
C) the minimum price that people are willing to pay for another unit of the good. 
D) marginal benefit. 
E) total surplus.

Question 20

The price of a cowboy hat is $100.Willie can produce a hat at a marginal cost of $130, Waylon can produce at a marginal cost of $100, and Merle can produce at a marginal cost of $85.Which of the following statements is correct?

Accepted Answer

A) The sum of producer surplus is $15. 
B) All three of these sellers will gain producer surplus from selling a hat. 
C) The sum of producer surplus is $30. 
D) Willie's producer surplus is $30. 
E) The sum of producer surplus is $45. 
A) The sum of producer surplus is $15. 
B) All three of these sellers will gain producer surplus from selling a hat. 
C) The sum of producer surplus is $30. 
D) Willie's producer surplus is $30. 
E) The sum of producer surplus is $45.

Why does the marginal benefit curve have a negative slope?

-In the above figure, the market is at its equilibrium.Area B is equal to

-The table above shows the production possibilities for an economy.When the economy produces a combination of 900 books and 50 loaves of bread,

-The figure above shows a nation's production possibilities frontier.If the marginal cost equals the marginal benefit at point A when 4 million pizzas are produced,

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

Compare and contrast production efficiency and allocative efficiency.

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

-In the figure above, suppose that $20 is the market equilibrium price.What is the amount of the consumer surplus?

The marginal benefit of the first hotdog consumed is ________ the marginal benefit of the fifth hotdog consumed.

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The producer surplus from the 20,000th soda is

-In the figure above, the cost of producing 10,000 pizzas a day is

-In the figure above, suppose the market is at equilibrium.Then area A is the

Which of the following is true for taxes? They

Deadweight loss and market failure is created when a market produces

-In the figure above, what is the consumer surplus per day?

To an economist, "value" is the same as

The price of a cowboy hat is $100.Willie can produce a hat at a marginal cost of $130, Waylon can produce at a marginal cost of $100, and Merle can produce at a marginal cost of $85.Which of the following statements is correct?

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

Why does the marginal benefit curve have a negative slope?

-In the above figure, the market is at its equilibrium.Area B is equal to

-The table above shows the production possibilities for an economy.When the economy produces a combination of 900 books and 50 loaves of bread,

-The figure above shows a nation's production possibilities frontier.If the marginal cost equals the marginal benefit at point A when 4 million pizzas are produced,

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

Compare and contrast production efficiency and allocative efficiency.

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

-In the figure above, suppose that $20 is the market equilibrium price.What is the amount of the consumer surplus?

The marginal benefit of the first hotdog consumed is ________ the marginal benefit of the fifth hotdog consumed.

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The producer surplus from the 20,000th soda is

-In the figure above, the cost of producing 10,000 pizzas a day is

-In the figure above, suppose the market is at equilibrium.Then area A is the

Which of the following is true for taxes? They

Deadweight loss and market failure is created when a market produces

-In the figure above, what is the consumer surplus per day?

To an economist, "value" is the same as

The price of a cowboy hat is $100.Willie can produce a hat at a marginal cost of $130, Waylon can produce at a marginal cost of $100, and Merle can produce at a marginal cost of $85.Which of the following statements is correct?

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