Question 1

We allocate resources efficiently when

Accepted Answer

A) marginal benefit is equal to marginal cost. 
B) marginal benefit is greater than marginal cost by any amount. 
C) marginal cost is greater than marginal benefit. 
D) total benefit is greater than total cost. 
E) marginal benefit is greater than marginal cost by as much as possible. 
A) marginal benefit is equal to marginal cost. 
B) marginal benefit is greater than marginal cost by any amount. 
C) marginal cost is greater than marginal benefit. 
D) total benefit is greater than total cost. 
E) marginal benefit is greater than marginal cost by as much as possible.

Question 2

-The figure above shows the supply curve for soda. The market price is $1.00 per soda. The marginal cost of 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 3

-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 pizz

Question 4

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 5

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 6

When a market is efficient, the

Accepted Answer

A) sum of consumer surplus and producer surplus is maximized. 
B) deadweight gain is maximized. 
C) quantity produced is maximized. 
D) marginal benefit of the last unit produced exceeds the marginal cost by as much as possible. 
E) total benefit equals the total cost. 
A) sum of consumer surplus and producer surplus is maximized. 
B) deadweight gain is maximized. 
C) quantity produced is maximized. 
D) marginal benefit of the last unit produced exceeds the marginal cost by as much as possible. 
E) total benefit equals the total cost.

Question 7

An unequal distribution of income is considered fair according to Robert Nozick if

Accepted Answer

A) marginal cost equals marginal benefit. 
B) the cost of administering a welfare system is minimized. 
C) property rights are enforced and voluntary exchange occurs. 
D) the economy is producing its maximum total output. 
E) resources are allocated using the command method. 
A) marginal cost equals marginal benefit. 
B) the cost of administering a welfare system is minimized. 
C) property rights are enforced and voluntary exchange occurs. 
D) the economy is producing its maximum total output. 
E) resources are allocated using the command method.

Question 8

-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 9

-The figure above shows Diane's demand curve for soda. The price of a soda is $1.00. Diane's total benefit from consuming 15 sodas is

Accepted Answer

A) $15.00. 
B) $26.25. 
C) $11.25. 
D) $0. 
E) None of the above answers is correct. 
A) $15.00. 
B) $26.25. 
C) $11.25. 
D) $0. 
E) None of the above answers is correct.

Question 10

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 11

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..

Question 12

In a figure, the consumer surplus is equal to the area ________ the ________ curve and ________ the price.

Accepted Answer

A) above; demand; above 
B) below; supply; below 
C) below; demand; below 
D) below; demand; above 
E) above; supply; below 
A) above; demand; above 
B) below; supply; below 
C) below; demand; below 
D) below; demand; above 
E) above; supply; below

Question 13

When a society achieves production efficiency, it is

Accepted Answer

A) definitely producing at a point on its PPF. 
B) perhaps producing at a point on its PPF and perhaps producing at a point inside its PPF. 
C) definitely producing that combination of goods and services that society values most highly. 
D) not fully employing all of its available resources to produce goods and services. 
E) enjoying a free lunch. 
A) definitely producing at a point on its PPF. 
B) perhaps producing at a point on its PPF and perhaps producing at a point inside its PPF. 
C) definitely producing that combination of goods and services that society values most highly. 
D) not fully employing all of its available resources to produce goods and services. 
E) enjoying a free lunch.

Question 14

-In the above figure, the market is at its equilibrium. Area A 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 15

If the price is greater than the marginal cost of producing a good, the seller has

Accepted Answer

A) no benefit from the sale. 
B) a loss. 
C) some producer surplus from the sale. 
D) some negative consumer surplus from the sale. 
E) None of the above answers is correct. 
A) no benefit from the sale. 
B) a loss. 
C) some producer surplus from the sale. 
D) some negative consumer surplus from the sale. 
E) None of the above answers is correct.

Question 16

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 17

When production moves from the efficient quantity to a point of overproduction,

Accepted Answer

A) consumer surplus definitely increases. 
B) the sum of producer surplus and consumer surplus increases. 
C) there is a deadweight loss. 
D) consumers definitely lose and producers definitely gain. 
E) consumers definitely gain and producers definitely lose. 
A) consumer surplus definitely increases. 
B) the sum of producer surplus and consumer surplus increases. 
C) there is a deadweight loss. 
D) consumers definitely lose and producers definitely gain. 
E) consumers definitely gain and producers definitely lose.

Question 18

The marginal cost curve is

Accepted Answer

A) downward sloping to reflect the bowed out PPF. 
B) downward sloping as marginal benefits increase. 
C) upward sloping because marginal cost falls as more of a good or service is produced. 
D) upward sloping to reflect the increasing opportunity cost of producing one more unit. 
E) U-shaped to reflect the bowed out PPF. 
A) downward sloping to reflect the bowed out PPF. 
B) downward sloping as marginal benefits increase. 
C) upward sloping because marginal cost falls as more of a good or service is produced. 
D) upward sloping to reflect the increasing opportunity cost of producing one more unit. 
E) U-shaped to reflect the bowed out PPF.

Question 19

The supply curve shows the

Accepted Answer

A) marginal benefit of a firm producing another unit of a good. 
B) dollars' worth of other goods and services we are willing to give up to get another unit of the good. 
C) minimum price that firms must receive to supply a certain quantity of a good. 
D) producer surplus of producing the good. 
E) maximum price that firms will accept in order to supply a certain quantity of a good. 
A) marginal benefit of a firm producing another unit of a good. 
B) dollars' worth of other goods and services we are willing to give up to get another unit of the good. 
C) minimum price that firms must receive to supply a certain quantity of a good. 
D) producer surplus of producing the good. 
E) maximum price that firms will accept in order to supply a certain quantity of a good.

Question 20

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours. For Kaley and Scott, allocative efficiency is achieved at what point?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
E) Either point A or point D 
A) A 
B) B 
C) C 
D) D 
E) Either point A or point D

We allocate resources efficiently when

-The figure above shows the supply curve for soda. The market price is $1.00 per soda. The marginal cost of the 20,000th soda is

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

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

When a market is efficient, the

An unequal distribution of income is considered fair according to Robert Nozick if

-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

-The figure above shows Diane's demand curve for soda. The price of a soda is $1.00. Diane's total benefit from consuming 15 sodas is

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

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

In a figure, the consumer surplus is equal to the area the curve and the price.

When a society achieves production efficiency, it is

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

If the price is greater than the marginal cost of producing a good, the seller has

Obstacles in achieving efficiency in a market include

When production moves from the efficient quantity to a point of overproduction,

The marginal cost curve is

The supply curve shows the

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours. For Kaley and Scott, allocative efficiency is achieved at what point?

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 6: Efficiency and Fairness of Markets

We allocate resources efficiently when

-The figure above shows the supply curve for soda. The market price is $1.00 per soda. The marginal cost of the 20,000th soda is

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

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

When a market is efficient, the

An unequal distribution of income is considered fair according to Robert Nozick if

-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

-The figure above shows Diane's demand curve for soda. The price of a soda is $1.00. Diane's total benefit from consuming 15 sodas is

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

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

In a figure, the consumer surplus is equal to the area ________ the ________ curve and ________ the price.

When a society achieves production efficiency, it is

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

If the price is greater than the marginal cost of producing a good, the seller has

Obstacles in achieving efficiency in a market include

When production moves from the efficient quantity to a point of overproduction,

The marginal cost curve is

The supply curve shows the

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours. For Kaley and Scott, allocative efficiency is achieved at what point?

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

In a figure, the consumer surplus is equal to the area the curve and the price.