Question 1

The phrase "decreasing marginal benefit" means that

Accepted Answer

A) the more you consume of the product, the less total benefit you derive. 
B) the marginal cost will be increasing as you consume more of a good. 
C) each additional unit of a good you consume gives you less additional benefit than the previous unit. 
D) Both answers A and B are correct. 
E) Both answers A and C are correct. 
A) the more you consume of the product, the less total benefit you derive. 
B) the marginal cost will be increasing as you consume more of a good. 
C) each additional unit of a good you consume gives you less additional benefit than the previous unit. 
D) Both answers A and B are correct. 
E) Both answers A and C are correct.

Question 2

Producer surplus is the ________ summed over the quantity produced.

Accepted Answer

A) price of the good minus the marginal cost of producing it 
B) marginal benefit of the good minus its marginal cost 
C) marginal benefit of the good minus its price 
D) marginal cost of the good minus the opportunity cost of producing it 
E) None of the above answers is correct. 
A) price of the good minus the marginal cost of producing it 
B) marginal benefit of the good minus its marginal cost 
C) marginal benefit of the good minus its price 
D) marginal cost of the good minus the opportunity cost of producing it 
E) None of the above answers is correct.

Question 3

6.6 Chapter Figures
   
The figure above shows the PPF, marginal cost curve, and marginal benefit curve for pizza.
-In the figure above, production efficiency occurs at ________, and allocative efficiency occurs at ________.

Accepted Answer

A) all points on the PPF; only one point on the PPF 
B) only one point on the PPF; all points on the PPF 
C) only one point on the PPF; only one point on the PPF 
D) all points on the PPF; all points on the PPF 
E) all points on the PPF; all points above the PPF 
A) all points on the PPF; only one point on the PPF 
B) only one point on the PPF; all points on the PPF 
C) only one point on the PPF; only one point on the PPF 
D) all points on the PPF; all points on the PPF 
E) all points on the PPF; all points above the PPF

Question 4

6.7 Integrative Questions
  
-The figure above shows the market for brooms. If 400 brooms are produced,

Accepted Answer

A) consumer surplus is maximized. 
B) producer surplus is maximized. 
C) market failure and a deadweight loss occur. 
D) marginal cost is greater than marginal benefit. 
E) consumer surplus equals zero. 
A) consumer surplus is maximized. 
B) producer surplus is maximized. 
C) market failure and a deadweight loss occur. 
D) marginal cost is greater than marginal benefit. 
E) consumer surplus equals zero.

Question 5

Ben's cost of making an additional rocking chair is $75.

Accepted Answer

A) If he sells it for a $100, his producer surplus is $25. 
B) His marginal cost is equal to $75. 
C) The marginal benefit to the consumer from the chair will be $75. 
D) Both answers A and B are correct. 
E) Both answers B and C are correct. 
A) If he sells it for a $100, his producer surplus is $25. 
B) His marginal cost is equal to $75. 
C) The marginal benefit to the consumer from the chair will be $75. 
D) Both answers A and B are correct. 
E) Both answers B and C are correct.

Question 6

Often politicians assert that a price, such as the price of gasoline or the rent for an apartment, is too high and that it is unfair for these prices to be so high. If these products are traded in competitive markets, what fairness rule are politicians using?
 Why?

Accepted Answer

The fairness rule is one of "It's not fa

Question 7

-In the figure above, if the market is at equilibrium, the sum of the total consumer surplus and the total producer surplus is

Accepted Answer

A) $240. 
B) $600. 
C) $1,000. 
D) $0. 
E) $60. 
A) $240. 
B) $600. 
C) $1,000. 
D) $0. 
E) $60.

Question 8

Which of the following describes the economic meanings of cost and price?

Accepted Answer

A) Cost is exchange worth, and price is dollar worth. 
B) Cost is what must be given up to produce a good, and price is what a seller receives when the good is sold. 
C) They are the same, and both mean what is received when a good is sold. 
D) Cost refers to what the buyers pay for the good, and price refers to what sellers receive when the good is sold. 
E) Cost refers to the price that buyers must pay to buy the good. 
A) Cost is exchange worth, and price is dollar worth. 
B) Cost is what must be given up to produce a good, and price is what a seller receives when the good is sold. 
C) They are the same, and both mean what is received when a good is sold. 
D) Cost refers to what the buyers pay for the good, and price refers to what sellers receive when the good is sold. 
E) Cost refers to the price that buyers must pay to buy the good.

Question 9

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 10

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 11

The producer surplus on a unit of a good is

Accepted Answer

A) equal to the marginal benefit from the good minus its price. 
B) equal to the price of the good minus the marginal cost of producing it. 
C) always equal to consumer surplus. 
D) Both answers A and C are correct. 
E) Both answers B and C are correct. 
A) equal to the marginal benefit from the good minus its price. 
B) equal to the price of the good minus the marginal cost of producing it. 
C) always equal to consumer surplus. 
D) Both answers A and C are correct. 
E) Both answers B and C are correct.

Question 12

Draw and describe a marginal cost curve for slices of pizza where the opportunity cost of producing a slice of pizza is a taco.

Accepted Answer

@#IMG-DLM& A marginal cost curve is drawn as an up

Question 13

What is consumer surplus?

Accepted Answer

Consumer surplus equals the difference b

Question 14

John has a marginal benefit of $7 for 1 slice of pizza, $5 for a second slice, $3 for a third slice, $1 for a fourth slice, and $0.50 for a fifth slice. The price of pizza is $1.50 per slice. Which of the following statements is correct?

Accepted Answer

A) John will purchase 3 slices of pizza and have consumer surplus of $10.50. 
B) John will purchase 4 slices of pizza and have consumer surplus of $12.00. 
C) John will purchase 2 slices of pizza and have consumer surplus of $1.50. 
D) John will purchase 3 slices of pizza and have consumer surplus of $4.50. 
E) John will purchase 2 slices of pizza and have consumer surplus of $3.00. 
A) John will purchase 3 slices of pizza and have consumer surplus of $10.50. 
B) John will purchase 4 slices of pizza and have consumer surplus of $12.00. 
C) John will purchase 2 slices of pizza and have consumer surplus of $1.50. 
D) John will purchase 3 slices of pizza and have consumer surplus of $4.50. 
E) John will purchase 2 slices of pizza and have consumer surplus of $3.00.

Question 15

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 16

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 17

Hester owns an ice cream shop. It costs her $2 per cone to make 10 ice cream cones. If she sells 10 cones for $4 each, her producer surplus on the 10 cones is equal to

Accepted Answer

A) $2. 
B) $20. 
C) $10. 
D) $40. 
E) $4. 
A) $2. 
B) $20. 
C) $10. 
D) $40. 
E) $4.

Question 18

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 19

Which of the following is true?
I. Marginal cost is measured by the maximum price that consumers are willing to pay for another unit of a good or service.
Ii. Producer surplus equals marginal benefit minus price, summed over the quantity produced.
Iii. A supply curve is a marginal cost curve.

Accepted Answer

A) Only iii 
B) Only i 
C) Only ii 
D) i and ii 
E) i and iii 
A) Only iii 
B) Only i 
C) Only ii 
D) i and ii 
E) i and iii

Question 20

Compare and contrast production efficiency and allocative efficiency.

Accepted Answer

Production efficiency means that we are

The phrase "decreasing marginal benefit" means that

Producer surplus is the ________ summed over the quantity produced.

6.6 Chapter Figures The figure above shows the PPF, marginal cost curve, and marginal benefit curve for pizza. -In the figure above, production efficiency occurs at , and allocative efficiency occurs at .

6.7 Integrative Questions -The figure above shows the market for brooms. If 400 brooms are produced,

Ben's cost of making an additional rocking chair is $75.

Often politicians assert that a price, such as the price of gasoline or the rent for an apartment, is too high and that it is unfair for these prices to be so high. If these products are traded in competitive markets, what fairness rule are politicians using? Why?

-In the figure above, if the market is at equilibrium, the sum of the total consumer surplus and the total producer surplus is

Which of the following describes the economic meanings of cost and price?

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.

Marginal cost equals

The producer surplus on a unit of a good is

Draw and describe a marginal cost curve for slices of pizza where the opportunity cost of producing a slice of pizza is a taco.

What is consumer surplus?

John has a marginal benefit of $7 for 1 slice of pizza, $5 for a second slice, $3 for a third slice, $1 for a fourth slice, and $0.50 for a fifth slice. The price of pizza is $1.50 per slice. Which of the following statements is correct?

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

Hester owns an ice cream shop. It costs her $2 per cone to make 10 ice cream cones. If she sells 10 cones for $4 each, her producer surplus on the 10 cones is equal to

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

Which of the following is true? I. Marginal cost is measured by the maximum price that consumers are willing to pay for another unit of a good or service. Ii. Producer surplus equals marginal benefit minus price, summed over the quantity produced. Iii. A supply curve is a marginal cost curve.

Compare and contrast production efficiency and allocative efficiency.

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

The phrase "decreasing marginal benefit" means that

Producer surplus is the ________ summed over the quantity produced.

6.6 Chapter Figures The figure above shows the PPF, marginal cost curve, and marginal benefit curve for pizza. -In the figure above, production efficiency occurs at ________, and allocative efficiency occurs at ________.

6.7 Integrative Questions -The figure above shows the market for brooms. If 400 brooms are produced,

Ben's cost of making an additional rocking chair is $75.

Often politicians assert that a price, such as the price of gasoline or the rent for an apartment, is too high and that it is unfair for these prices to be so high. If these products are traded in competitive markets, what fairness rule are politicians using? Why?

-In the figure above, if the market is at equilibrium, the sum of the total consumer surplus and the total producer surplus is

Which of the following describes the economic meanings of cost and price?

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.

Marginal cost equals

The producer surplus on a unit of a good is

Draw and describe a marginal cost curve for slices of pizza where the opportunity cost of producing a slice of pizza is a taco.

What is consumer surplus?

John has a marginal benefit of $7 for 1 slice of pizza, $5 for a second slice, $3 for a third slice, $1 for a fourth slice, and $0.50 for a fifth slice. The price of pizza is $1.50 per slice. Which of the following statements is correct?

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

Hester owns an ice cream shop. It costs her $2 per cone to make 10 ice cream cones. If she sells 10 cones for $4 each, her producer surplus on the 10 cones is equal to

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

Which of the following is true? I. Marginal cost is measured by the maximum price that consumers are willing to pay for another unit of a good or service. Ii. Producer surplus equals marginal benefit minus price, summed over the quantity produced. Iii. A supply curve is a marginal cost curve.

Compare and contrast production efficiency and allocative efficiency.

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

6.6 Chapter Figures The figure above shows the PPF, marginal cost curve, and marginal benefit curve for pizza. -In the figure above, production efficiency occurs at , and allocative efficiency occurs at .

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