Question 1

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

Accepted Answer

A) consumer surplus. 
B) total revenue. 
C) total surplus. 
D) marginal benefit. 
E) producer surplus. 
A) consumer surplus. 
B) total revenue. 
C) total surplus. 
D) marginal benefit. 
E) producer surplus.

Question 2

-In the figure above, suppose that $20 is the market equilibrium price. What is the amount of the consumer surplus?

Accepted Answer

A) $3,375 
B) $3,000 
C) $375 
D) 150 units 
E) $1,500 
A) $3,375 
B) $3,000 
C) $375 
D) 150 units 
E) $1,500

Question 3

When the market price rises, the consumers' consumer surplus ________. When the market price falls, the consumers' consumer surplus ________.

Accepted Answer

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

Question 4

If the market for bicycles is efficient, then

Accepted Answer

A) no more bicycles can be produced. 
B) marginal benefit exceeds marginal cost. 
C) consumer surplus must be greater than producer surplus. 
D) it is not possible to produce more bicycles without sacrificing another, more highly valued good. 
E) consumer surplus must equal producer surplus. 
A) no more bicycles can be produced. 
B) marginal benefit exceeds marginal cost. 
C) consumer surplus must be greater than producer surplus. 
D) it is not possible to produce more bicycles without sacrificing another, more highly valued good. 
E) consumer surplus must equal producer surplus.

Question 5

When people cannot be excluded from consuming a good, even if they have not paid for the good, competitive markets would

Accepted Answer

A) produce more of the good than society needs. 
B) allocate more resources than the efficient amount to the production of the good. 
C) produce the good so that people could enjoy a "free ride." 
D) produce less than the efficient quantity. 
E) eliminate the deadweight loss. 
A) produce more of the good than society needs. 
B) allocate more resources than the efficient amount to the production of the good. 
C) produce the good so that people could enjoy a "free ride." 
D) produce less than the efficient quantity. 
E) eliminate the deadweight loss.

Question 6

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 7

To an economist, "value" is the same as

Accepted Answer

A) marginal cost. 
B) consumer surplus. 
C) the minimum price that people are willing to pay for another unit of the good. 
D) marginal benefit. 
E) total surplus. 
A) marginal cost. 
B) consumer surplus. 
C) the minimum price that people are willing to pay for another unit of the good. 
D) marginal benefit. 
E) total surplus.

Question 8

-In the above figure, what is the marginal cost of the 4th pizza?

Accepted Answer

A) $0 
B) $4 
C) $9 
D) $36 
E) 4 pizzas 
A) $0 
B) $4 
C) $9 
D) $36 
E) 4 pizzas

Question 9

-The figure above shows the marginal benefit and marginal cost curves for pizza. In the figure, what is the efficient quantity of pizza?

Accepted Answer

A) 0 pizzas 
B) 10,000 pizzas 
C) 20,000 pizzas 
D) 30,000 pizzas 
E) The efficient quantity cannot be determine without more information. 
A) 0 pizzas 
B) 10,000 pizzas 
C) 20,000 pizzas 
D) 30,000 pizzas 
E) The efficient quantity cannot be determine without more information.

Question 10

The chair of the Department of Economics at Colorado State University decided that office space is for tenured faculty and that graduate students are required to share cubicles. What method is used to allocate office space?

Accepted Answer

A) lottery 
B) majority rule 
C) command 
D) first-come, first-served 
E) sharing equally 
A) lottery 
B) majority rule 
C) command 
D) first-come, first-served 
E) sharing equally

Question 11

The concept of "the invisible hand" suggests that to attain efficiency, the government should

Accepted Answer

A) guide economic activity. 
B) set prices. 
C) leave prices and output decisions to the competitive market. 
D) regulate all production decisions, but not price decisions. 
E) make sure that a command system is used to allocate resources. 
A) guide economic activity. 
B) set prices. 
C) leave prices and output decisions to the competitive market. 
D) regulate all production decisions, but not price decisions. 
E) make sure that a command system is used to allocate resources.

Question 12

Allocative efficiency is achieved when the marginal benefit of a good

Accepted Answer

A) exceeds the marginal cost by as much as possible. 
B) exceeds the marginal cost but not by as much as possible. 
C) is less than the marginal cost. 
D) equals the marginal cost. 
E) equals zero. 
A) exceeds the marginal cost by as much as possible. 
B) exceeds the marginal cost but not by as much as possible. 
C) is less than the marginal cost. 
D) equals the marginal cost. 
E) equals zero.

Question 13

Why does redistribution, so that the distribution of income is equal, bring about less total output?

Accepted Answer

A) Incentives to work are reduced. 
B) No one can determine marginal benefit or marginal cost as a result. 
C) Those in political power will likely receive a larger income. 
D) Because the marginal benefit and marginal cost of work have been equally increased. 
E) The premise of the question is incorrect because an equal distribution of income would increase rather than decrease the total amount produced. 
A) Incentives to work are reduced. 
B) No one can determine marginal benefit or marginal cost as a result. 
C) Those in political power will likely receive a larger income. 
D) Because the marginal benefit and marginal cost of work have been equally increased. 
E) The premise of the question is incorrect because an equal distribution of income would increase rather than decrease the total amount produced.

Question 14

Lauren and Katy each bought a new bike lock for $20. Both Lauren and Katy would have paid $25 for the lock. The total consumer surplus for Lauren and Katy taken together equaled

Accepted Answer

A) $15. 
B) $10. 
C) $40. 
D) $20. 
E) $50. 
A) $15. 
B) $10. 
C) $40. 
D) $20. 
E) $50.

Question 15

-In the figure above, suppose that $20 is the market equilibrium price. Which area is the consumer surplus?

Accepted Answer

A) A 
B) B 
C) A + B 
D) B - A 
E) B ÷ A 
A) A 
B) B 
C) A + B 
D) B - A 
E) B ÷ A

Question 16

-The figure above shows the supply and demand curves for pizza. If the market is at its competitive equilibrium, what area in the graph above represents:
a. consumer surplus?
b. producer surplus?

Accepted Answer

The answer of  
-The figure above shows the supply...

Question 17

When society produces the combination of goods and services on the PPF that it values the most highly, society has

Accepted Answer

A) achieved only production efficiency and definitely not allocative efficiency. 
B) achieved only allocative efficiency definitely not production efficiency. 
C) achieved both production efficiency and allocative efficiency. 
D) achieved a free lunch. 
E) perhaps achieved production efficiency and has perhaps achieved allocative efficiency. 
A) achieved only production efficiency and definitely not allocative efficiency. 
B) achieved only allocative efficiency definitely not production efficiency. 
C) achieved both production efficiency and allocative efficiency. 
D) achieved a free lunch. 
E) perhaps achieved production efficiency and has perhaps achieved allocative efficiency.

Question 18

6.6 Chapter Figures
   
The figure above shows the PPF, marginal cost curve, and marginal benefit curve for pizza.
-In the figure above, when 6,000 pizzas are produced, the marginal benefit of a pizza ________ its marginal cost, which means ________ pizza is being produced.

Accepted Answer

A) exceeds its marginal cost; too little 
B) exceeds its marginal cost; too much 
C) is below its marginal cost; too much 
D) is below its marginal cost; too little 
E) equals its marginal cost; the efficient quantity of 
A) exceeds its marginal cost; too little 
B) exceeds its marginal cost; too much 
C) is below its marginal cost; too much 
D) is below its marginal cost; too little 
E) equals its marginal cost; the efficient quantity of

Question 19

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 20

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.

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

-In the figure above, suppose that $20 is the market equilibrium price. What is the amount of the consumer surplus?

When the market price rises, the consumers' consumer surplus . When the market price falls, the consumers' consumer surplus .

If the market for bicycles is efficient, then

When people cannot be excluded from consuming a good, even if they have not paid for the good, competitive markets would

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

To an economist, "value" is the same as

-In the above figure, what is the marginal cost of the 4th pizza?

-The figure above shows the marginal benefit and marginal cost curves for pizza. In the figure, what is the efficient quantity of pizza?

The chair of the Department of Economics at Colorado State University decided that office space is for tenured faculty and that graduate students are required to share cubicles. What method is used to allocate office space?

The concept of "the invisible hand" suggests that to attain efficiency, the government should

Allocative efficiency is achieved when the marginal benefit of a good

Why does redistribution, so that the distribution of income is equal, bring about less total output?

Lauren and Katy each bought a new bike lock for $20. Both Lauren and Katy would have paid $25 for the lock. The total consumer surplus for Lauren and Katy taken together equaled

-In the figure above, suppose that $20 is the market equilibrium price. Which area is the consumer surplus?

-The figure above shows the supply and demand curves for pizza. If the market is at its competitive equilibrium, what area in the graph above represents: a. consumer surplus? b. producer surplus?

When society produces the combination of goods and services on the PPF that it values the most highly, society has

6.6 Chapter Figures The figure above shows the PPF, marginal cost curve, and marginal benefit curve for pizza. -In the figure above, when 6,000 pizzas are produced, the marginal benefit of a pizza its marginal cost, which means pizza is being produced.

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

Which of the following are the rules for finding the point of 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

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

-In the figure above, suppose that $20 is the market equilibrium price. What is the amount of the consumer surplus?

When the market price rises, the consumers' consumer surplus ________. When the market price falls, the consumers' consumer surplus ________.

If the market for bicycles is efficient, then

When people cannot be excluded from consuming a good, even if they have not paid for the good, competitive markets would

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

To an economist, "value" is the same as

-In the above figure, what is the marginal cost of the 4th pizza?

-The figure above shows the marginal benefit and marginal cost curves for pizza. In the figure, what is the efficient quantity of pizza?

The chair of the Department of Economics at Colorado State University decided that office space is for tenured faculty and that graduate students are required to share cubicles. What method is used to allocate office space?

The concept of "the invisible hand" suggests that to attain efficiency, the government should

Allocative efficiency is achieved when the marginal benefit of a good

Why does redistribution, so that the distribution of income is equal, bring about less total output?

Lauren and Katy each bought a new bike lock for $20. Both Lauren and Katy would have paid $25 for the lock. The total consumer surplus for Lauren and Katy taken together equaled

-In the figure above, suppose that $20 is the market equilibrium price. Which area is the consumer surplus?

-The figure above shows the supply and demand curves for pizza. If the market is at its competitive equilibrium, what area in the graph above represents: a. consumer surplus? b. producer surplus?

When society produces the combination of goods and services on the PPF that it values the most highly, society has

6.6 Chapter Figures The figure above shows the PPF, marginal cost curve, and marginal benefit curve for pizza. -In the figure above, when 6,000 pizzas are produced, the marginal benefit of a pizza ________ its marginal cost, which means ________ pizza is being produced.

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

Which of the following are the rules for finding the point of 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

When the market price rises, the consumers' consumer surplus . When the market price falls, the consumers' consumer surplus .

6.6 Chapter Figures The figure above shows the PPF, marginal cost curve, and marginal benefit curve for pizza. -In the figure above, when 6,000 pizzas are produced, the marginal benefit of a pizza its marginal cost, which means pizza is being produced.