Question 1

Resource use is allocative efficient

Accepted Answer

A) when it is not possible to produce more of one good. 
B) when we produce goods and services that we value most highly. 
C) when most resources are fully employed. 
D) at any point on the PPF. 
E) at all points either on or within the PPF because all these production points are attainable. 
A) when it is not possible to produce more of one good. 
B) when we produce goods and services that we value most highly. 
C) when most resources are fully employed. 
D) at any point on the PPF. 
E) at all points either on or within the PPF because all these production points are attainable.

Question 2

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 3

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Quantity } \
\text { (millions of } \
\text { bushels of apples) }
\end{array} & \begin{array} { c } 
\text { Marginal benefit } \
\text { (oranges per bushel) }
\end{array} & \begin{array} { c } 
\text { Marginal cost } \
\text { (oranges per bushel) }
\end{array} \
\hline 5 & 10 & 1 \
10 & 8 & 3 \
15 & 6 & 6 \
20 & 4 & 9 \
25 & 2 & 12 \
\hline
\end{array}$$
-Using the values for the marginal benefit and the marginal cost of a bushel of apples given in the table above, what is the allocatively efficient quantity of apples?
 Suppose 10 million bushels of apples are produced. Should the quantity be increased or decreased?
 What if 20 million bushels are produced; should the quantity be increased or decreased?

Accepted Answer

The allocatively efficient quantity of a

Question 4

What did Adam Smith identify as the source of the invisible hand in 1776?

Accepted Answer

A) a benevolent central government that decided was best for everyone 
B) an individual's concern for fellow humans 
C) an individual's own self-interest 
D) the stock market 
E) buyers' and suppliers' concerns to obtain and retain good reputations 
A) a benevolent central government that decided was best for everyone 
B) an individual's concern for fellow humans 
C) an individual's own self-interest 
D) the stock market 
E) buyers' and suppliers' concerns to obtain and retain good reputations

Question 5

The figure above shows the supply curve for pizza and the market price of pizza.
-In the figure above, the cost of producing 10,000 pizzas a day is

Accepted Answer

A) $60,000. 
B) $100,000. 
C) $40,000. 
D) $80,000. 
E) $50,000. 
A) $60,000. 
B) $100,000. 
C) $40,000. 
D) $80,000. 
E) $50,000.

Question 6

Marginal benefit equals the

Accepted Answer

A) benefit that a person receives from consuming another unit of a good. 
B) additional efficiency from producing another unit of a good. 
C) increase in profit from producing another unit of a good. 
D) cost of producing another unit of a good. 
E) total benefit from consuming all the units of the good or service. 
A) benefit that a person receives from consuming another unit of a good. 
B) additional efficiency from producing another unit of a good. 
C) increase in profit from producing another unit of a good. 
D) cost of producing another unit of a good. 
E) total benefit from consuming all the units of the good or service.

Question 7

According to the "fair rules" view of fairness, are taxes fair?
 Explain.

Accepted Answer

Taxes are unfair according to the fair r

Question 8

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 9

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.

Question 10

Efficiency occurs in a market when

Accepted Answer

A) the sum of consumer surplus and producer surplus is maximized. 
B) consumer surplus is equal to producer surplus. 
C) consumer surplus is less than producer surplus. 
D) consumer surplus is greater than producer surplus. 
E) total revenue is maximized. 
A) the sum of consumer surplus and producer surplus is maximized. 
B) consumer surplus is equal to producer surplus. 
C) consumer surplus is less than producer surplus. 
D) consumer surplus is greater than producer surplus. 
E) total revenue is maximized.

Question 11

-The diagram above depicts the demand for, and market price of, buckets of raw oysters in Orlando.
a. What is the consumer surplus of the person who buys the 100th bucket of oysters?
b. What is the consumer surplus of the person who buys the 200th bucket of oysters?
c. What is the consumer surplus of the person who buys the 300th bucket of oysters?
d. What is the total consumer surplus from all the oysters consumed in the market?

Accepted Answer

a. The consumer surplus of the person wh

Question 12

Allocative efficiency is achieved when the marginal benefit of a good

Accepted Answer

A) exceeds the marginal cost regardless of how much the difference is. 
B) is less than its marginal cost. 
C) is equal to its marginal cost. 
D) equals zero. 
E) exceeds the marginal cost by as much as possible. 
A) exceeds the marginal cost regardless of how much the difference is. 
B) is less than its marginal cost. 
C) is equal to its marginal cost. 
D) equals zero. 
E) exceeds the marginal cost by as much as possible.

Question 13

Which of the following leads to a deadweight loss?
I. overproduction
Ii. underproduction
Iii. taxes
Iv. monopoly

Accepted Answer

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

Question 14

-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 15

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 16

When economists use the term "big tradeoff" when discussing efficiency they are referring to the tradeoff between

Accepted Answer

A) external costs and external benefits. 
B) marginal cost and marginal benefits. 
C) producer surplus and consumer surplus. 
D) efficiency and fairness. 
E) deadweight loss and producer/consumer surplus. 
A) external costs and external benefits. 
B) marginal cost and marginal benefits. 
C) producer surplus and consumer surplus. 
D) efficiency and fairness. 
E) deadweight loss and producer/consumer surplus.

Question 17

-The figure above shows the market for pants. If the efficient quantity is produced,

Accepted Answer

A) there will be no consumer surplus. 
B) the sum of consumer and producer surplus will be maximized. 
C) a small deadweight loss will result. 
D) the sum of consumer and producer surplus will be minimized. 
E) the consumer surplus on all the pants must equal the producer surplus on all the pants. 
A) there will be no consumer surplus. 
B) the sum of consumer and producer surplus will be maximized. 
C) a small deadweight loss will result. 
D) the sum of consumer and producer surplus will be minimized. 
E) the consumer surplus on all the pants must equal the producer surplus on all the pants.

Question 18

A monopoly is

Accepted Answer

A) the single buyer of some good or service. 
B) a firm that has control of a market because it is the only seller. 
C) a firm that creates enormous external costs. 
D) a firm that faces intense competition. 
E) a cost of producing a good or service. 
A) the single buyer of some good or service. 
B) a firm that has control of a market because it is the only seller. 
C) a firm that creates enormous external costs. 
D) a firm that faces intense competition. 
E) a cost of producing a good or service.

Question 19

A demand curve can be interpreted as

Accepted Answer

A) a marginal benefit curve. 
B) a total benefit curve. 
C) an average benefit curve. 
D) a marginal cost curve. 
E) None of the above answers is correct. 
A) a marginal benefit curve. 
B) a total benefit curve. 
C) an average benefit curve. 
D) a marginal cost curve. 
E) None of the above answers is correct.

Question 20

In 2009, tickets to a Presidential Town Hall meeting were distributed to individuals through a random selection of those who registered on a website. The tickets were allocated by which method?

Accepted Answer

A) lottery 
B) majority rule 
C) contest 
D) first-come, first-served 
E) personal characteristics 
A) lottery 
B) majority rule 
C) contest 
D) first-come, first-served 
E) personal characteristics

Resource use is allocative efficient

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

What did Adam Smith identify as the source of the invisible hand in 1776?

The figure above shows the supply curve for pizza and the market price of pizza. -In the figure above, the cost of producing 10,000 pizzas a day is

Marginal benefit equals the

According to the "fair rules" view of fairness, are taxes fair? Explain.

Value and price can be compared by noting that

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

Efficiency occurs in a market when

Allocative efficiency is achieved when the marginal benefit of a good

Which of the following leads to a deadweight loss? I. overproduction Ii. underproduction Iii. taxes Iv. monopoly

-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

The "fair rules" view of fairness is based on

When economists use the term "big tradeoff" when discussing efficiency they are referring to the tradeoff between

-The figure above shows the market for pants. If the efficient quantity is produced,

A monopoly is

A demand curve can be interpreted as

In 2009, tickets to a Presidential Town Hall meeting were distributed to individuals through a random selection of those who registered on a website. The tickets were allocated by which method?

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

Resource use is allocative efficient

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

What did Adam Smith identify as the source of the invisible hand in 1776?

The figure above shows the supply curve for pizza and the market price of pizza. -In the figure above, the cost of producing 10,000 pizzas a day is

Marginal benefit equals the

According to the "fair rules" view of fairness, are taxes fair? Explain.

Value and price can be compared by noting that

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

Efficiency occurs in a market when

Allocative efficiency is achieved when the marginal benefit of a good

Which of the following leads to a deadweight loss? I. overproduction Ii. underproduction Iii. taxes Iv. monopoly

-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

The "fair rules" view of fairness is based on

When economists use the term "big tradeoff" when discussing efficiency they are referring to the tradeoff between

-The figure above shows the market for pants. If the efficient quantity is produced,

A monopoly is

A demand curve can be interpreted as

In 2009, tickets to a Presidential Town Hall meeting were distributed to individuals through a random selection of those who registered on a website. The tickets were allocated by which method?

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