Question 1

Overproduction results in

Accepted Answer

A) external costs. 
B) external benefits. 
C) deadweight loss. 
D) super-efficiency. 
E) the marginal benefit of the last unit produced being larger than the marginal cost. 
A) external costs. 
B) external benefits. 
C) deadweight loss. 
D) super-efficiency. 
E) the marginal benefit of the last unit produced being larger than the marginal cost.

Question 2

If a firm produces five chairs with marginal costs of $25, $30, $40, $55, and $75, respectively, and sells them for $80 each, what is the firm's total producer surplus?

Accepted Answer

A) $400 
B) $225 
C) $175 
D) $150 
E) $80 
A) $400 
B) $225 
C) $175 
D) $150 
E) $80

Question 3

When people cannot be excluded from consuming a good, even if they have not paid for the good, competitive markets would

Accepted Answer

A) produce more of the good than society needs. 
B) allocate more resources than the efficient amount to the production of the good. 
C) produce the good so that people could enjoy a "free ride." 
D) produce less than the efficient quantity. 
E) eliminate the deadweight loss. 
A) produce more of the good than society needs. 
B) allocate more resources than the efficient amount to the production of the good. 
C) produce the good so that people could enjoy a "free ride." 
D) produce less than the efficient quantity. 
E) eliminate the deadweight loss.

Question 4

If the price of a visit to Sea World exceeds the marginal cost of the visit by $13, a producer surplus exists for Sea World." Is this statement true or false?

Accepted Answer

The statement is true.Anytime

Question 5

If the government takes over the distribution of some scarce good in a time of a natural disaster and provides the good at no charge to users, what must also be done?

Accepted Answer

A) The government must produce the good itself. 
B) Some rationing mechanism must be set up to determine who gets the good. 
C) Everyone hurt in the natural disaster must get one of the goods. 
D) nothing 
E) Because we live in a democracy, the government must use majority rule as the rationing mechanism. 
A) The government must produce the good itself. 
B) Some rationing mechanism must be set up to determine who gets the good. 
C) Everyone hurt in the natural disaster must get one of the goods. 
D) nothing 
E) Because we live in a democracy, the government must use majority rule as the rationing mechanism.

Question 6

A benefit that accrues to people other than the buyer of a good is known as ________ benefit.

Accepted Answer

A) an internal 
B) an external 
C) a marginal 
D) a total 
E) a subsidized 
A) an internal 
B) an external 
C) a marginal 
D) a total 
E) a subsidized

Question 7

If an economy is producing on its PPF, then it is definitely achieving

Accepted Answer

A) both production and allocative efficiency. 
B) only production efficiency but it definitely is not achieving allocative efficiency. 
C) only allocative efficiency but it is definitely not achieving production efficiency. 
D) neither production nor allocative efficiency. 
E) only production efficiency. 
A) both production and allocative efficiency. 
B) only production efficiency but it definitely is not achieving allocative efficiency. 
C) only allocative efficiency but it is definitely not achieving production efficiency. 
D) neither production nor allocative efficiency. 
E) only production efficiency.

Question 8

Which of the following statements is correct?

Accepted Answer

A) Consumer surplus equals the price paid for a good. 
B) The consumer surplus from a good is always larger than the total benefit from the good. 
C) An increase in price decreases consumer surplus. 
D) An increase in price has no effect on consumer surplus. 
E) The consumer surplus from a good or service must always equal producer surplus. 
A) Consumer surplus equals the price paid for a good. 
B) The consumer surplus from a good is always larger than the total benefit from the good. 
C) An increase in price decreases consumer surplus. 
D) An increase in price has no effect on consumer surplus. 
E) The consumer surplus from a good or service must always equal producer surplus.

Question 9

The concept of "the invisible hand" suggests that to attain efficiency, the government should

Accepted Answer

A) guide economic activity. 
B) set prices. 
C) leave prices and output decisions to the competitive market. 
D) regulate all production decisions, but not price decisions. 
E) make sure that a command system is used to allocate resources. 
A) guide economic activity. 
B) set prices. 
C) leave prices and output decisions to the competitive market. 
D) regulate all production decisions, but not price decisions. 
E) make sure that a command system is used to allocate resources.

Question 10

-In the figure above, if the market price is $12, then the total consumer surplus is

Accepted Answer

A) $12. 
B) $10. 
C) minimized. 
D) $240. 
E) $480. 
A) $12. 
B) $10. 
C) minimized. 
D) $240. 
E) $480.

Question 11

What are the two views of fairness? How does each view redistribution of income from the rich to the poor?

Accepted Answer

One view is that "it's not fair if the r

Question 12

Marginal benefit is the

Accepted Answer

A) total benefit we receive from consuming a good or service. 
B) additional benefit we receive from consuming one more unit of a good or service. 
C) minimum amount of other goods or services we are willing to give up. 
D) opportunities given up to get one more unit of a good or service. 
E) the benefit we receive from consuming one more unit of a good or service minus the cost of the producing one more unit of the good or service. 
A) total benefit we receive from consuming a good or service. 
B) additional benefit we receive from consuming one more unit of a good or service. 
C) minimum amount of other goods or services we are willing to give up. 
D) opportunities given up to get one more unit of a good or service. 
E) the benefit we receive from consuming one more unit of a good or service minus the cost of the producing one more unit of the good or service.

Question 13

When the marginal benefit and marginal cost of sodas are equal, then

Accepted Answer

A) the production of sodas might be allocatively efficient but it is definitely production inefficient. 
B) the allocatively inefficient amount of sodas is being produced. 
C) more sodas should be produced to reach the allocatively efficient quantity. 
D) fewer sodas should be produced to reach the allocatively efficient quantity. 
E) the allocatively efficient amount of sodas is being produced. 
A) the production of sodas might be allocatively efficient but it is definitely production inefficient. 
B) the allocatively inefficient amount of sodas is being produced. 
C) more sodas should be produced to reach the allocatively efficient quantity. 
D) fewer sodas should be produced to reach the allocatively efficient quantity. 
E) the allocatively efficient amount of sodas is being produced.

Question 14

The demand curve is the same as another curve.Which curve is the same as the demand curve? Why are the curves the same?

Accepted Answer

The demand curve is the same as the marg

Question 15

At a competitive market equilibrium, if there are no taxes, subsidies, price regulations, quantity regulations, or externalities
I∙consumer surplus is minimized.
Ii∙marginal cost equals marginal benefit.
Iii∙resources are efficiently used.
Iv∙producer surplus is minimized.

Accepted Answer

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

Question 16

In general, as the consumption of a good or service increases, the marginal benefit from consuming that good or service

Accepted Answer

A) increases. 
B) decreases. 
C) stays the same. 
D) at first increases and then decreases. 
E) at first decreases and then increases. 
A) increases. 
B) decreases. 
C) stays the same. 
D) at first increases and then decreases. 
E) at first decreases and then increases.

Question 17

The marginal benefit of a taco is measured by

Accepted Answer

A) the price of the taco. 
B) the amount of another good a person is willing to give up to get one more taco. 
C) the amount of another good a person must give up to get one more taco. 
D) a point on the PPF. 
E) the opportunity cost of producing another taco. 
A) the price of the taco. 
B) the amount of another good a person is willing to give up to get one more taco. 
C) the amount of another good a person must give up to get one more taco. 
D) a point on the PPF. 
E) the opportunity cost of producing another taco.

Question 18

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 19

-The figure above shows the supply and demand for pizza.
a∙What is the efficient level of output?
b∙If 70,000 pizzas are produced, what area represents the deadweight loss?
c∙Why does the deadweight loss in part (b)occur?
d∙If 20,000 pizzas are produced, what area represents the deadweight loss?
e∙Why does the deadweight loss in part (d)occur?

Accepted Answer

a∙40,000 pizzas is the efficient quantit

Question 20

Suppose Dan is willing to pay a maximum of $3,000 for a piano, but finds one he can buy for $2,500.Dan's consumer surplus from this piano is

Accepted Answer

A) $5,500. 
B) $3,000. 
C) $2,500. 
D) $500. 
E) zero because he buys the piano. 
A) $5,500. 
B) $3,000. 
C) $2,500. 
D) $500. 
E) zero because he buys the piano.

Overproduction results in

If a firm produces five chairs with marginal costs of $25, $30, $40, $55, and $75, respectively, and sells them for $80 each, what is the firm's total producer surplus?

When people cannot be excluded from consuming a good, even if they have not paid for the good, competitive markets would

If the price of a visit to Sea World exceeds the marginal cost of the visit by $13, a producer surplus exists for Sea World." Is this statement true or false?

If the government takes over the distribution of some scarce good in a time of a natural disaster and provides the good at no charge to users, what must also be done?

A benefit that accrues to people other than the buyer of a good is known as ________ benefit.

If an economy is producing on its PPF, then it is definitely achieving

Which of the following statements is correct?

The concept of "the invisible hand" suggests that to attain efficiency, the government should

-In the figure above, if the market price is $12, then the total consumer surplus is

What are the two views of fairness? How does each view redistribution of income from the rich to the poor?

Marginal benefit is the

When the marginal benefit and marginal cost of sodas are equal, then

The demand curve is the same as another curve.Which curve is the same as the demand curve? Why are the curves the same?

At a competitive market equilibrium, if there are no taxes, subsidies, price regulations, quantity regulations, or externalities I∙consumer surplus is minimized. Ii∙marginal cost equals marginal benefit. Iii∙resources are efficiently used. Iv∙producer surplus is minimized.

In general, as the consumption of a good or service increases, the marginal benefit from consuming that good or service

The marginal benefit of a taco is measured by

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

Suppose Dan is willing to pay a maximum of $3,000 for a piano, but finds one he can buy for $2,500.Dan's consumer surplus from this piano is

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

Overproduction results in

If a firm produces five chairs with marginal costs of $25, $30, $40, $55, and $75, respectively, and sells them for $80 each, what is the firm's total producer surplus?

When people cannot be excluded from consuming a good, even if they have not paid for the good, competitive markets would

If the price of a visit to Sea World exceeds the marginal cost of the visit by $13, a producer surplus exists for Sea World." Is this statement true or false?

If the government takes over the distribution of some scarce good in a time of a natural disaster and provides the good at no charge to users, what must also be done?

A benefit that accrues to people other than the buyer of a good is known as ________ benefit.

If an economy is producing on its PPF, then it is definitely achieving

Which of the following statements is correct?

The concept of "the invisible hand" suggests that to attain efficiency, the government should

-In the figure above, if the market price is $12, then the total consumer surplus is

What are the two views of fairness? How does each view redistribution of income from the rich to the poor?

Marginal benefit is the

When the marginal benefit and marginal cost of sodas are equal, then

The demand curve is the same as another curve.Which curve is the same as the demand curve? Why are the curves the same?

At a competitive market equilibrium, if there are no taxes, subsidies, price regulations, quantity regulations, or externalities I∙consumer surplus is minimized. Ii∙marginal cost equals marginal benefit. Iii∙resources are efficiently used. Iv∙producer surplus is minimized.

In general, as the consumption of a good or service increases, the marginal benefit from consuming that good or service

The marginal benefit of a taco is measured by

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

Suppose Dan is willing to pay a maximum of $3,000 for a piano, but finds one he can buy for $2,500.Dan's consumer surplus from this piano is

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