Question 1

A quantity less than the equilibrium quantity in a competitive market is inefficient because

Accepted Answer

A) the marginal benefit of another unit is greater than its marginal cost. 
B) too much of the good is being produced. 
C) the marginal cost of another unit is greater than its marginal benefit. 
D) the marginal benefit of another unit is not equal to zero. 
E) the marginal benefit is not maximized. 
A) the marginal benefit of another unit is greater than its marginal cost. 
B) too much of the good is being produced. 
C) the marginal cost of another unit is greater than its marginal benefit. 
D) the marginal benefit of another unit is not equal to zero. 
E) the marginal benefit is not maximized.

Question 2

When the city of Fresno holds a referendum to determine if taxes will be raised to pay for road repairs, the city 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 3

Subsidies ________ the price paid by the buyer and ________ the price received by the seller.

Accepted Answer

A) increase, increase 
B) increase, decrease 
C) decrease, increase 
D) decrease, decrease 
E) do not change; increase 
A) increase, increase 
B) increase, decrease 
C) decrease, increase 
D) decrease, decrease 
E) do not change; increase

Question 4

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The producer surplus from the 10,000th 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 5

Production efficiency requires that

Accepted Answer

A) the economy be producing on the PPF but the marginal cost of a good does not need to equal its marginal benefit. 
B) the economy be producing on the PPF and that the marginal cost of a good equals its marginal benefit. 
C) the marginal cost of a good equals its marginal benefit but the economy does not need to be producing on its PPF. 
D) the society be producing at the point of allocative efficiency. 
E) opportunity costs be minimized. 
A) the economy be producing on the PPF but the marginal cost of a good does not need to equal its marginal benefit. 
B) the economy be producing on the PPF and that the marginal cost of a good equals its marginal benefit. 
C) the marginal cost of a good equals its marginal benefit but the economy does not need to be producing on its PPF. 
D) the society be producing at the point of allocative efficiency. 
E) opportunity costs be minimized.

Question 6

Which of the following are the rules for finding the point of allocative efficiency?

Accepted Answer

A) Produce on the PPF and then produce where the marginal benefit and marginal cost are as large as possible. 
B) Produce on the PPF and then produce where marginal benefit equals marginal cost. 
C) Produce on the PPF and then produce where marginal benefit and marginal cost are constant. 
D) Produce on the PPF and then produce where the marginal benefit exceeds marginal cost by as much as possible. 
E) Produce anywhere on the PPF. 
A) Produce on the PPF and then produce where the marginal benefit and marginal cost are as large as possible. 
B) Produce on the PPF and then produce where marginal benefit equals marginal cost. 
C) Produce on the PPF and then produce where marginal benefit and marginal cost are constant. 
D) Produce on the PPF and then produce where the marginal benefit exceeds marginal cost by as much as possible. 
E) Produce anywhere on the PPF.

Question 7

Which of the following is most closely related to the "fair results" approach to fairness?

Accepted Answer

A) efficient resource use 
B) having an equal income distribution 
C) voluntary exchange 
D) the command system of allocating resources 
E) price hikes in a natural disaster 
A) efficient resource use 
B) having an equal income distribution 
C) voluntary exchange 
D) the command system of allocating resources 
E) price hikes in a natural disaster

Question 8

Why is a competitive market efficient?

Accepted Answer

Efficiency is attained when production i

Question 9

Consumer 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) below the demand curve and above 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) below the demand curve and above the supply curve.

Question 10

The point that each glass of lemonade consumed on a hot day brings lower and lower levels of satisfaction is known as the principle of

Accepted Answer

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

Question 11

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's consumer surplus from her 10th soda is

Accepted Answer

A) $0.00. 
B) $0.50. 
C) $1.00. 
D) $1.50. 
E) $2.50. 
A) $0.00. 
B) $0.50. 
C) $1.00. 
D) $1.50. 
E) $2.50.

Question 12

-The figure above shows Lauren's demand curve for Barbie dolls and the market price for Barbie dolls.Using the area of the consumer surplus triangle, Lauren's total consumer surplus from purchasing 3 dolls is

Accepted Answer

A) $5.50. 
B) $10.00. 
C) $22.50. 
D) $45.00. 
E) 3 dolls. 
A) $5.50. 
B) $10.00. 
C) $22.50. 
D) $45.00. 
E) 3 dolls.

Question 13

-The figure above shows the supply curve for pizzas.
a∙What is the marginal cost of the 20th pizza?
b∙What is the minimum supply price of the 20th pizza?
c∙If the price is $6 per pizza, what is the producer surplus on the 20th pizza?
d∙If the price is $6 per pizza, what is the producer surplus for the total quantity of pizzas produced?
e∙If the price is $8 per pizza, what is the producer surplus for the total quantity of pizzas produced?
f∙If the price is $10 per pizza, what is the producer surplus for the total quantity of pizzas produced?

Accepted Answer

a∙The marginal cost of the 20th pizza is

Question 14

A good or service can be consumed by a person even if he or she didn't pay for it is called ________ good.

Accepted Answer

A) a private 
B) a public 
C) a normal 
D) an inferior 
E) an external 
A) a private 
B) a public 
C) a normal 
D) an inferior 
E) an external

Question 15

Explain the difference between the words "value," "price," and "cost."

Accepted Answer

Value refers to the marginal benefit of

Question 16

The maximum amount of other goods and services that people are willing to give up in order to get one more unit of a good is defined as the good's

Accepted Answer

A) marginal benefit. 
B) total benefit. 
C) marginal cost. 
D) total cost. 
E) price. 
A) marginal benefit. 
B) total benefit. 
C) marginal cost. 
D) total cost. 
E) price.

Question 17

The consumer acquires a consumer surplus on a good if the marginal benefit is

Accepted Answer

A) equal to the price. 
B) greater than the price. 
C) less than the price. 
D) zero. 
E) less than the marginal cost. 
A) equal to the price. 
B) greater than the price. 
C) less than the price. 
D) zero. 
E) less than the marginal cost.

Question 18

Which of the following situations describing a resource allocation method most resembles the majority rule 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) Jose works at Intel. His manager tells him what work needs to be completed each month. 
E) Matt's mother had the rule that whoever cuts the cake chooses their slice last. 
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) Jose works at Intel. His manager tells him what work needs to be completed each month. 
E) Matt's mother had the rule that whoever cuts the cake chooses their slice last.

Question 19

The "fair rules" view of fairness is based on

Accepted Answer

A) income transfers from the rich to the poor. 
B) property rights and voluntary exchange. 
C) utilitarianism. 
D) the big tradeoff. 
E) allocating resources using majority rule. 
A) income transfers from the rich to the poor. 
B) property rights and voluntary exchange. 
C) utilitarianism. 
D) the big tradeoff. 
E) allocating resources using majority rule.

Question 20

Shelby said to her friend, "I just bought a new pair of climbing shoes and I love them so much that I totally would have paid more for them." Shelby was describing the concept of

Accepted Answer

A) consumer surplus. 
B) producer surplus. 
C) equilibrium. 
D) marginal cost. 
E) total surplus. 
A) consumer surplus. 
B) producer surplus. 
C) equilibrium. 
D) marginal cost. 
E) total surplus.

A quantity less than the equilibrium quantity in a competitive market is inefficient because

When the city of Fresno holds a referendum to determine if taxes will be raised to pay for road repairs, the city is using a ________ allocation method.

Subsidies the price paid by the buyer and the price received by the seller.

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The producer surplus from the 10,000th soda is

Production efficiency requires that

Which of the following are the rules for finding the point of allocative efficiency?

Which of the following is most closely related to the "fair results" approach to fairness?

Why is a competitive market efficient?

Consumer surplus is the area

The point that each glass of lemonade consumed on a hot day brings lower and lower levels of satisfaction is known as the principle of

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's consumer surplus from her 10th soda is

-The figure above shows Lauren's demand curve for Barbie dolls and the market price for Barbie dolls.Using the area of the consumer surplus triangle, Lauren's total consumer surplus from purchasing 3 dolls is

A good or service can be consumed by a person even if he or she didn't pay for it is called ________ good.

Explain the difference between the words "value," "price," and "cost."

The maximum amount of other goods and services that people are willing to give up in order to get one more unit of a good is defined as the good's

The consumer acquires a consumer surplus on a good if the marginal benefit is

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

The "fair rules" view of fairness is based on

Shelby said to her friend, "I just bought a new pair of climbing shoes and I love them so much that I totally would have paid more for them." Shelby was describing the concept 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

A quantity less than the equilibrium quantity in a competitive market is inefficient because

When the city of Fresno holds a referendum to determine if taxes will be raised to pay for road repairs, the city is using a ________ allocation method.

Subsidies ________ the price paid by the buyer and ________ the price received by the seller.

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The producer surplus from the 10,000th soda is

Production efficiency requires that

Which of the following are the rules for finding the point of allocative efficiency?

Which of the following is most closely related to the "fair results" approach to fairness?

Why is a competitive market efficient?

Consumer surplus is the area

The point that each glass of lemonade consumed on a hot day brings lower and lower levels of satisfaction is known as the principle of

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's consumer surplus from her 10th soda is

-The figure above shows Lauren's demand curve for Barbie dolls and the market price for Barbie dolls.Using the area of the consumer surplus triangle, Lauren's total consumer surplus from purchasing 3 dolls is

A good or service can be consumed by a person even if he or she didn't pay for it is called ________ good.

Explain the difference between the words "value," "price," and "cost."

The maximum amount of other goods and services that people are willing to give up in order to get one more unit of a good is defined as the good's

The consumer acquires a consumer surplus on a good if the marginal benefit is

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

The "fair rules" view of fairness is based on

Shelby said to her friend, "I just bought a new pair of climbing shoes and I love them so much that I totally would have paid more for them." Shelby was describing the concept 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

Subsidies the price paid by the buyer and the price received by the seller.