Question 1

If the demand for a good does not change, how will an increase in the price of that good affect the consumer surplus from it?

Accepted Answer

The consumer surplus equals the differen

Question 2

Honda will sell its vehicles to anyone who wants to and can buy one.Honda is using a ________ allocation method.

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 3

When underproduction occurs,

Accepted Answer

A) producers gain more surplus at the expense of consumers. 
B) marginal cost is greater than marginal benefit. 
C) consumer surplus increases to a harmful amount. 
D) there is a deadweight loss that is borne by the entire society. 
E) the deadweight loss harms only consumers. 
A) producers gain more surplus at the expense of consumers. 
B) marginal cost is greater than marginal benefit. 
C) consumer surplus increases to a harmful amount. 
D) there is a deadweight loss that is borne by the entire society. 
E) the deadweight loss harms only consumers.

Question 4

If the difference between the marginal benefit and the marginal cost of a good is as large as possible,

Accepted Answer

A) resources are being used with maximum efficiency. 
B) resources would create more value producing other goods and hence the production of this good should be decreased. 
C) more of the good should be produced. 
D) allocative efficiency has been attained. 
E) Both answers A and D are correct. 
A) resources are being used with maximum efficiency. 
B) resources would create more value producing other goods and hence the production of this good should be decreased. 
C) more of the good should be produced. 
D) allocative efficiency has been attained. 
E) Both answers A and D are correct.

Question 5

If the price of a pizza is $10 per pizza, the consumer surplus from the first pizza consumed ________ the consumer surplus from the second pizza consumed.

Accepted Answer

A) is greater than 
B) equals 
C) is less than 
D) cannot be compared to 
E) None of the above answers is correct because more information is needed about the marginal cost of producing the pizzas to answer the question. 
A) is greater than 
B) equals 
C) is less than 
D) cannot be compared to 
E) None of the above answers is correct because more information is needed about the marginal cost of producing the pizzas to answer the question.

Question 6

What are the two ways demand curves can be interpreted?

Accepted Answer

Demand curves can be used to find either

Question 7

The marginal cost of a good or service

Accepted Answer

A) can be calculated from the marginal benefit of that good or service. 
B) decreases as more of the good or service is produced. 
C) can be derived from the production possibilities frontier. 
D) graphs as a positively sloped curve, so it cannot be derived from the production possibilities frontier, which is downward sloping. 
E) None of the above answers are correct. 
A) can be calculated from the marginal benefit of that good or service. 
B) decreases as more of the good or service is produced. 
C) can be derived from the production possibilities frontier. 
D) graphs as a positively sloped curve, so it cannot be derived from the production possibilities frontier, which is downward sloping. 
E) None of the above answers are correct.

Question 8

Marginal cost equals

Accepted Answer

A) the profitability derived from producing another unit of output. 
B) all the opportunity cost of producing the amount of output. 
C) or exceeds the marginal benefit. 
D) productive efficiency. 
E) the opportunity cost of producing one more unit of output. 
A) the profitability derived from producing another unit of output. 
B) all the opportunity cost of producing the amount of output. 
C) or exceeds the marginal benefit. 
D) productive efficiency. 
E) the opportunity cost of producing one more unit of output.

Question 9

A supply curve is the same as a

Accepted Answer

A) total cost curve. 
B) marginal cost curve. 
C) total benefit curve. 
D) marginal benefit curve. 
E) deadweight loss curve. 
A) total cost curve. 
B) marginal cost curve. 
C) total benefit curve. 
D) marginal benefit curve. 
E) deadweight loss curve.

Question 10

Mark loves ice cream.At any point in time, he will buy an additional ice cream cone if

Accepted Answer

A) the marginal benefit from it exceeds the price. 
B) the marginal benefit from it is zero. 
C) his willingness to pay is less than the price. 
D) there is no deadweight loss produced by his purchase of a cone. 
E) None of the above answers is correct. 
A) the marginal benefit from it exceeds the price. 
B) the marginal benefit from it is zero. 
C) his willingness to pay is less than the price. 
D) there is no deadweight loss produced by his purchase of a cone. 
E) None of the above answers is correct.

Question 11

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.At 1 manatee swim per week, Kaley's marginal benefit is ________ and Scott's marginal cost is ________.

Accepted Answer

A) $40; $10 
B) $40; $40 
C) $90; $50 
D) None of the above answers is correct. 
A) $40; $10 
B) $40; $40 
C) $90; $50 
D) None of the above answers is correct.

Question 12

When allocative efficiency occurs,

Accepted Answer

A) an economy produces the goods and services most highly valued. 
B) marginal benefit exceeds marginal cost by some amount. 
C) technology must be increasing. 
D) we can simultaneously produce more of all goods. 
E) marginal benefit exceeds marginal cost by as much as possible. 
A) an economy produces the goods and services most highly valued. 
B) marginal benefit exceeds marginal cost by some amount. 
C) technology must be increasing. 
D) we can simultaneously produce more of all goods. 
E) marginal benefit exceeds marginal cost by as much as possible.

Question 13

In a figure that shows a supply curve and a demand curve, producer surplus is the area

Accepted Answer

A) below the demand curve and above the market price. 
B) below the supply curve and above the market price. 
C) above the demand curve and below the market price. 
D) above the supply curve and below the market price. 
E) between the demand curve and the supply curve. 
A) below the demand curve and above the market price. 
B) below the supply curve and above the market price. 
C) above the demand curve and below the market price. 
D) above the supply curve and below the market price. 
E) between the demand curve and the supply curve.

Question 14

Which of the following situations describing a resource allocation method most resembles the force method?

Accepted Answer

A) Seventy percent of Austin's chess club wanted to purchase new chess sets and thirty percent did not. The club purchased the sets. 
B) Lattes are sold at Starbucks. 
C) Food from the Weld County Food Bank is distributed to families in need. 
D) Mandy saved her allowance to buy a 12 pack of cream soda. When Mandy's brother saw the soda, he took four. 
E) Jose works at Intel. His manager tells him what work needs to be completed each month. 
A) Seventy percent of Austin's chess club wanted to purchase new chess sets and thirty percent did not. The club purchased the sets. 
B) Lattes are sold at Starbucks. 
C) Food from the Weld County Food Bank is distributed to families in need. 
D) Mandy saved her allowance to buy a 12 pack of cream soda. When Mandy's brother saw the soda, he took four. 
E) Jose works at Intel. His manager tells him what work needs to be completed each month.

Question 15

If a landlord will rent an apartment only to married couples, the landlord is using a ________ allocation method.

Accepted Answer

A) majority rule 
B) market price 
C) contest 
D) personal characteristics 
E) command 
A) majority rule 
B) market price 
C) contest 
D) personal characteristics 
E) command

Question 16

A supply curve shows the ________ of producing one more unit of a good or service.

Accepted Answer

A) producer surplus 
B) consumer surplus 
C) total benefit 
D) marginal cost 
E) marginal benefit to the producer 
A) producer surplus 
B) consumer surplus 
C) total benefit 
D) marginal cost 
E) marginal benefit to the producer

Question 17

Obstacles in achieving efficiency in a market include

Accepted Answer

A) public goods. 
B) the presence of an external cost or benefit. 
C) competition. 
D)  Both answers A and C are correct. 
E)  Both answers A and B are correct. 
A) public goods. 
B) the presence of an external cost or benefit. 
C) competition. 
D)  Both answers A and C are correct. 
E)  Both answers A and B are correct.

Question 18

As more of a good is consumed, marginal benefit ________ and as more of a good is produced, marginal cost ________.

Accepted Answer

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

Question 19

The efficiency of competitive markets happens because

Accepted Answer

A) of the benevolence of the butcher, the brewer, and the baker. 
B) people make environmentally aware purchasing decisions. 
C) prices adjust to make buying plans and selling plans compatible. 
D) government organizes and monitors production. 
E) the U.S. economy uses a command system to allocate resources within the competitive markets. 
A) of the benevolence of the butcher, the brewer, and the baker. 
B) people make environmentally aware purchasing decisions. 
C) prices adjust to make buying plans and selling plans compatible. 
D) government organizes and monitors production. 
E) the U.S. economy uses a command system to allocate resources within the competitive markets.

Question 20

The supply curve is upward sloping because of

Accepted Answer

A) increasing marginal cost. 
B) decreasing marginal benefit. 
C) decreasing marginal cost. 
D) increasing marginal benefit. 
E) increasing total cost. 
A) increasing marginal cost. 
B) decreasing marginal benefit. 
C) decreasing marginal cost. 
D) increasing marginal benefit. 
E) increasing total cost.

If the demand for a good does not change, how will an increase in the price of that good affect the consumer surplus from it?

Honda will sell its vehicles to anyone who wants to and can buy one.Honda is using a ________ allocation method.

When underproduction occurs,

If the difference between the marginal benefit and the marginal cost of a good is as large as possible,

If the price of a pizza is $10 per pizza, the consumer surplus from the first pizza consumed ________ the consumer surplus from the second pizza consumed.

What are the two ways demand curves can be interpreted?

The marginal cost of a good or service

Marginal cost equals

A supply curve is the same as a

Mark loves ice cream.At any point in time, he will buy an additional ice cream cone if

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.At 1 manatee swim per week, Kaley's marginal benefit is and Scott's marginal cost is .

When allocative efficiency occurs,

In a figure that shows a supply curve and a demand curve, producer surplus is the area

Which of the following situations describing a resource allocation method most resembles the force method?

If a landlord will rent an apartment only to married couples, the landlord is using a ________ allocation method.

A supply curve shows the ________ of producing one more unit of a good or service.

Obstacles in achieving efficiency in a market include

As more of a good is consumed, marginal benefit and as more of a good is produced, marginal cost .

The efficiency of competitive markets happens because

The supply curve is upward sloping because of

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

If the demand for a good does not change, how will an increase in the price of that good affect the consumer surplus from it?

Honda will sell its vehicles to anyone who wants to and can buy one.Honda is using a ________ allocation method.

When underproduction occurs,

If the difference between the marginal benefit and the marginal cost of a good is as large as possible,

If the price of a pizza is $10 per pizza, the consumer surplus from the first pizza consumed ________ the consumer surplus from the second pizza consumed.

What are the two ways demand curves can be interpreted?

The marginal cost of a good or service

Marginal cost equals

A supply curve is the same as a

Mark loves ice cream.At any point in time, he will buy an additional ice cream cone if

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.At 1 manatee swim per week, Kaley's marginal benefit is ________ and Scott's marginal cost is ________.

When allocative efficiency occurs,

In a figure that shows a supply curve and a demand curve, producer surplus is the area

Which of the following situations describing a resource allocation method most resembles the force method?

If a landlord will rent an apartment only to married couples, the landlord is using a ________ allocation method.

A supply curve shows the ________ of producing one more unit of a good or service.

Obstacles in achieving efficiency in a market include

As more of a good is consumed, marginal benefit ________ and as more of a good is produced, marginal cost ________.

The efficiency of competitive markets happens because

The supply curve is upward sloping because of

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

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.At 1 manatee swim per week, Kaley's marginal benefit is and Scott's marginal cost is .

As more of a good is consumed, marginal benefit and as more of a good is produced, marginal cost .