Question 1

Marginal benefit is the benefit that a person receives from consuming

Accepted Answer

A) a good or service until the person has grown tired of it. 
B) only goods and services that are free. 
C) one more unit of a good or service. 
D) all of the possible units of a good or service that can be consumed. 
E) one more unit of a good and is equal to the cost of producing the unit of the good. 
A) a good or service until the person has grown tired of it. 
B) only goods and services that are free. 
C) one more unit of a good or service. 
D) all of the possible units of a good or service that can be consumed. 
E) one more unit of a good and is equal to the cost of producing the unit of the good.

Question 2

Value and price can be compared by noting that

Accepted Answer

A) they are the same thing. 
B) value is always greater than price. 
C) value is what we must pay while price is what we are willing to pay. 
D) price is what we must pay and value is what we are willing to pay. 
E) value is what the seller receives when we buy a good and price is what we must pay when we buy a good. 
A) they are the same thing. 
B) value is always greater than price. 
C) value is what we must pay while price is what we are willing to pay. 
D) price is what we must pay and value is what we are willing to pay. 
E) value is what the seller receives when we buy a good and price is what we must pay when we buy a good.

Question 3

-The figure above shows the market for pants.If 6 million pairs of pants are produced the deadweight loss is

Accepted Answer

A) zero. 
B) the triangle ABE. 
C) the triangle BCE. 
D) the triangle ACE. 
E) the triangle BCE minus the triangle ABE. 
A) zero. 
B) the triangle ABE. 
C) the triangle BCE. 
D) the triangle ACE. 
E) the triangle BCE minus the triangle ABE.

Question 4

Explain how the invisible hand delivers an efficient market outcome.

Accepted Answer

The invisible hand concepts claims that

Question 5

For resource use to be allocatively efficient, when the marginal benefit of a slice of pizza exceeds the marginal cost ________.

Accepted Answer

A) more slices of pizza should be produced 
B) fewer slices of pizza should be produced 
C) no more slices of pizza should be produced 
D) allocative efficiency is reached only if the marginal benefit exceeds the marginal cost by as much as possible 
E) None of the above answers is correct. 
A) more slices of pizza should be produced 
B) fewer slices of pizza should be produced 
C) no more slices of pizza should be produced 
D) allocative efficiency is reached only if the marginal benefit exceeds the marginal cost by as much as possible 
E) None of the above answers is correct.

Question 6

Suppose Jennifer derives $100 in marginal benefits from her first skiing trip and $80 from her third trip.Her marginal benefit from her second trip is likely to be

Accepted Answer

A) more than $100. 
B) between $100 and $80. 
C) between $79 and $51. 
D) less than $51. 
E) some amount that cannot be calculated without additional information. 
A) more than $100. 
B) between $100 and $80. 
C) between $79 and $51. 
D) less than $51. 
E) some amount that cannot be calculated without additional information.

Question 7

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

Accepted Answer

@#IMG-DLM& A marginal cost curve is drawn as an up

Question 8

-In the figure above, if pizza production is restricted to 5,000 pizzas a day, the deadweight loss is

Accepted Answer

A) $45,000 per day. 
B) $12,500 per day. 
C) $22,500 per day. 
D) $90,000 per day. 
E) zero. 
A) $45,000 per day. 
B) $12,500 per day. 
C) $22,500 per day. 
D) $90,000 per day. 
E) zero.

Question 9

The marginal benefit from buying a particular unit of a good

Accepted Answer

A) is the amount paid for the unit plus the consumer surplus of the unit. 
B) increases as market price increases. 
C) is the difference between the amount paid for the unit and the market price of the unit. 
D) is the difference between the total benefit of the unit and the marginal cost of producing that unit. 
E) None of the above answers is correct. 
A) is the amount paid for the unit plus the consumer surplus of the unit. 
B) increases as market price increases. 
C) is the difference between the amount paid for the unit and the market price of the unit. 
D) is the difference between the total benefit of the unit and the marginal cost of producing that unit. 
E) None of the above answers is correct.

Question 10

-The figure above shows Lauren's demand curve for Barbie dolls and the market price for Barbie dolls.In order for Lauren to avoid paying more for dolls than they are worth to her, she must not purchase any more than

Accepted Answer

A) 0 dolls. 
B) 1 doll. 
C) 3 dolls. 
D) 5 dolls. 
E) 4 dolls. 
A) 0 dolls. 
B) 1 doll. 
C) 3 dolls. 
D) 5 dolls. 
E) 4 dolls.

Question 11

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 12

Which describes the economic meanings of value and price?

Accepted Answer

A) Value is exchange worth minus marginal benefit and price is the dollars that must be paid. 
B) Value is the marginal benefit obtained and price is the dollars that must be paid. 
C) Value refers to the gain the producer gets from the good or service and price refers to the gain the consumer gets from the good or service. 
D) Value refers to the dollars that must be paid and price refers to the cost of producing the good. 
E) They are the same and both mean the dollars that must be paid. 
A) Value is exchange worth minus marginal benefit and price is the dollars that must be paid. 
B) Value is the marginal benefit obtained and price is the dollars that must be paid. 
C) Value refers to the gain the producer gets from the good or service and price refers to the gain the consumer gets from the good or service. 
D) Value refers to the dollars that must be paid and price refers to the cost of producing the good. 
E) They are the same and both mean the dollars that must be paid.

Question 13

Walmart has a limited number of "Black Friday" (the day-after Thanksgiving Day)special items on sale at prices well below their typical price.Walmart opens at 10 PM on Thanksgiving.Walmart is using a ________ allocation method for these items.

Accepted Answer

A) first-come, first-served 
B) market price 
C) contest 
D) majority rule 
E) command 
A) first-come, first-served 
B) market price 
C) contest 
D) majority rule 
E) command

Question 14

A point on the demand curve shows the

Accepted Answer

A) minimum price that people are willing to pay for another unit of a good. 
B) dollars' worth of other goods that people must sacrifice to consume another unit of the good. 
C) maximum price that people are willing to pay for another unit of a good. 
D) consumer surplus a person gains from consuming a unit of a good. 
E) marginal benefit minus the consumer surplus from consuming another unit of a good. 
A) minimum price that people are willing to pay for another unit of a good. 
B) dollars' worth of other goods that people must sacrifice to consume another unit of the good. 
C) maximum price that people are willing to pay for another unit of a good. 
D) consumer surplus a person gains from consuming a unit of a good. 
E) marginal benefit minus the consumer surplus from consuming another unit of a good.

Question 15

Suppose a market produces 5,000 tons of wheat.At this quantity, the marginal cost exceeds the marginal benefit.This outcome could be the result of

Accepted Answer

A) a quantity regulation limiting the amount that can be produced. 
B) a monopoly. 
C) a subsidy. 
D) an external benefit. 
E) producing a public good. 
A) a quantity regulation limiting the amount that can be produced. 
B) a monopoly. 
C) a subsidy. 
D) an external benefit. 
E) producing a public good.

Question 16

Which of the following is an example of consumer surplus?

Accepted Answer

A) Jose buys a hamburger for $2 and tells you he would not have paid a penny more. 
B) John believes the price he paid for his computer was too high. 
C) Mary buys a paper tablet for $2 and finds the same good at another store for $1.50. 
D) Sue would have paid $15 for a new compact disc but paid only $10. 
E) Anne finds a mountain bike for which she is willing to pay a maximum of $550 and the price of the bike is $600. 
A) Jose buys a hamburger for $2 and tells you he would not have paid a penny more. 
B) John believes the price he paid for his computer was too high. 
C) Mary buys a paper tablet for $2 and finds the same good at another store for $1.50. 
D) Sue would have paid $15 for a new compact disc but paid only $10. 
E) Anne finds a mountain bike for which she is willing to pay a maximum of $550 and the price of the bike is $600.

Question 17

-Bill and Krista sell potted plants from a roadside stand.The figure above shows Bill and Krista's marginal cost curve and the market price.If Bill and Krista sell 60 plants per week, their producer surplus from the 60th plant will equal

Accepted Answer

A) $8. 
B) $480. 
C) $0. 
D) $20. 
E) More information is needed to answer the question. 
A) $8. 
B) $480. 
C) $0. 
D) $20. 
E) More information is needed to answer the question.

Question 18

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.

Question 19

Assume the Nozick rules are being followed in the economy so that the distribution of income is fair.What must be true for this to create an efficient allocation of resources?

Accepted Answer

A) All people are earning equal incomes. 
B) There are no public goods, monopolies, high transactions costs, or external costs and benefits. 
C) The costs of administering redistribution equals the benefits the poor receive. 
D) The government must redistribute income in a fashion that minimizes the "big tradeoff." 
E) The government must allocate resources using a command mechanism. 
A) All people are earning equal incomes. 
B) There are no public goods, monopolies, high transactions costs, or external costs and benefits. 
C) The costs of administering redistribution equals the benefits the poor receive. 
D) The government must redistribute income in a fashion that minimizes the "big tradeoff." 
E) The government must allocate resources using a command mechanism.

Question 20

When society must decrease the production of something in order to produce more of another good or service, society has necessarily achieved

Accepted Answer

A) only production efficiency. 
B) only allocative efficiency. 
C) both production efficiency and allocative efficiency. 
D) a free lunch. 
E) the maximum opportunity cost.. 
A) only production efficiency. 
B) only allocative efficiency. 
C) both production efficiency and allocative efficiency. 
D) a free lunch. 
E) the maximum opportunity cost..

Marginal benefit is the benefit that a person receives from consuming

Value and price can be compared by noting that

-The figure above shows the market for pants.If 6 million pairs of pants are produced the deadweight loss is

Explain how the invisible hand delivers an efficient market outcome.

For resource use to be allocatively efficient, when the marginal benefit of a slice of pizza exceeds the marginal cost ________.

Suppose Jennifer derives $100 in marginal benefits from her first skiing trip and $80 from her third trip.Her marginal benefit from her second trip is likely to be

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

-In the figure above, if pizza production is restricted to 5,000 pizzas a day, the deadweight loss is

The marginal benefit from buying a particular unit of a good

-The figure above shows Lauren's demand curve for Barbie dolls and the market price for Barbie dolls.In order for Lauren to avoid paying more for dolls than they are worth to her, she must not purchase any more than

Which describes the economic meanings of value and price?

Walmart has a limited number of "Black Friday" (the day-after Thanksgiving Day)special items on sale at prices well below their typical price.Walmart opens at 10 PM on Thanksgiving.Walmart is using a ________ allocation method for these items.

A point on the demand curve shows the

Suppose a market produces 5,000 tons of wheat.At this quantity, the marginal cost exceeds the marginal benefit.This outcome could be the result of

Which of the following is an example of consumer surplus?

-Bill and Krista sell potted plants from a roadside stand.The figure above shows Bill and Krista's marginal cost curve and the market price.If Bill and Krista sell 60 plants per week, their producer surplus from the 60th plant will equal

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

Assume the Nozick rules are being followed in the economy so that the distribution of income is fair.What must be true for this to create an efficient allocation of resources?

When society must decrease the production of something in order to produce more of another good or service, society has necessarily achieved

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

Marginal benefit is the benefit that a person receives from consuming

Value and price can be compared by noting that

-The figure above shows the market for pants.If 6 million pairs of pants are produced the deadweight loss is

Explain how the invisible hand delivers an efficient market outcome.

For resource use to be allocatively efficient, when the marginal benefit of a slice of pizza exceeds the marginal cost ________.

Suppose Jennifer derives $100 in marginal benefits from her first skiing trip and $80 from her third trip.Her marginal benefit from her second trip is likely to be

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

-In the figure above, if pizza production is restricted to 5,000 pizzas a day, the deadweight loss is

The marginal benefit from buying a particular unit of a good

-The figure above shows Lauren's demand curve for Barbie dolls and the market price for Barbie dolls.In order for Lauren to avoid paying more for dolls than they are worth to her, she must not purchase any more than

Which describes the economic meanings of value and price?

Walmart has a limited number of "Black Friday" (the day-after Thanksgiving Day)special items on sale at prices well below their typical price.Walmart opens at 10 PM on Thanksgiving.Walmart is using a ________ allocation method for these items.

A point on the demand curve shows the

Suppose a market produces 5,000 tons of wheat.At this quantity, the marginal cost exceeds the marginal benefit.This outcome could be the result of

Which of the following is an example of consumer surplus?

-Bill and Krista sell potted plants from a roadside stand.The figure above shows Bill and Krista's marginal cost curve and the market price.If Bill and Krista sell 60 plants per week, their producer surplus from the 60th plant will equal

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

Assume the Nozick rules are being followed in the economy so that the distribution of income is fair.What must be true for this to create an efficient allocation of resources?

When society must decrease the production of something in order to produce more of another good or service, society has necessarily achieved

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