Question 1

At a competitive equilibrium, if there are no taxes, subsidies, price regulations, quantity regulations, or externalities

Accepted Answer

A) the marginal benefit is greater than the marginal cost. 
B) resource use is efficient. 
C) the marginal benefit is less than the marginal cost. 
D) both the marginal benefit and the marginal cost of the last unit produced equal zero. 
E) the marginal benefit is greater than the marginal cost by as much as possible. 
A) the marginal benefit is greater than the marginal cost. 
B) resource use is efficient. 
C) the marginal benefit is less than the marginal cost. 
D) both the marginal benefit and the marginal cost of the last unit produced equal zero. 
E) the marginal benefit is greater than the marginal cost by as much as possible.

Question 2

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 3

The idea of the "big tradeoff" points out the costs of

Accepted Answer

A) using a results approach to fairness when the rules approach is correct. 
B) transferring income using taxes that decrease efficiency. 
C) price hikes during natural disasters. 
D) using a rules approach to fairness when the results approach is correct. 
E) None of the above answers is correct. 
A) using a results approach to fairness when the rules approach is correct. 
B) transferring income using taxes that decrease efficiency. 
C) price hikes during natural disasters. 
D) using a rules approach to fairness when the results approach is correct. 
E) None of the above answers is correct.

Question 4

Is the marginal benefit someone enjoys from a good or service the same as the price he or she pays?
 Explain your answer.

Accepted Answer

Generally the marginal benefit of a good

Question 5

When the marginal benefit and marginal cost of sodas are equal, then

Accepted Answer

A) the production of sodas might be allocatively efficient but it is definitely production inefficient. 
B) the allocatively inefficient amount of sodas is being produced. 
C) more sodas should be produced to reach the allocatively efficient quantity. 
D) fewer sodas should be produced to reach the allocatively efficient quantity. 
E) the allocatively efficient amount of sodas is being produced. 
A) the production of sodas might be allocatively efficient but it is definitely production inefficient. 
B) the allocatively inefficient amount of sodas is being produced. 
C) more sodas should be produced to reach the allocatively efficient quantity. 
D) fewer sodas should be produced to reach the allocatively efficient quantity. 
E) the allocatively efficient amount of sodas is being produced.

Question 6

What is the "invisible hand"?

Accepted Answer

The invisible hand is a concept articula

Question 7

The "invisible hand" refers to the notion that

Accepted Answer

A) competitive markets send resources to their highest valued uses. 
B) government intervention is necessary to ensure efficiency. 
C) marginal benefit decreases as more is consumed. 
D) marginal cost increases as more is produced. 
E) no matter what allocation method is used, the resulting production is efficient. 
A) competitive markets send resources to their highest valued uses. 
B) government intervention is necessary to ensure efficiency. 
C) marginal benefit decreases as more is consumed. 
D) marginal cost increases as more is produced. 
E) no matter what allocation method is used, the resulting production is efficient.

Question 8

If one producer has control over an entire market and underproduces, the producer will

Accepted Answer

A) increase producer surplus by lowering pollution costs. 
B) increase consumer surplus by lowering producer surplus. 
C) increase both consumer and producer surplus. 
D) create a deadweight loss. 
E) decrease the deadweight loss that would exist if the market were efficient. 
A) increase producer surplus by lowering pollution costs. 
B) increase consumer surplus by lowering producer surplus. 
C) increase both consumer and producer surplus. 
D) create a deadweight loss. 
E) decrease the deadweight loss that would exist if the market were efficient.

Question 9

Mandy saved her allowance to buy a 12 pack of cream soda. When Mandy's brother saw the soda, he took four. Sodas were allocated between Mandy and her brother through

Accepted Answer

A) force. 
B) majority rule. 
C) first-come, first-served. 
D) sharing equally. 
E) personal characteristics. 
A) force. 
B) majority rule. 
C) first-come, first-served. 
D) sharing equally. 
E) personal characteristics.

Question 10

The figure above shows the supply curve for pizza and the market price of pizza.
-In the figure above, the total revenue from pizza per 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 11

-In the above figure, if the market quantity is restricted to 500,000 and the price is allowed to rise to set the quantity demanded equal to the quantity supplied, then the producer surplus is equal to

Accepted Answer

A) area D + area F. 
B) area C + area E. 
C) area A + area B + area C. 
D) area A + area B. 
E) area B + area D + area F. 
A) area D + area F. 
B) area C + area E. 
C) area A + area B + area C. 
D) area A + area B. 
E) area B + area D + area F.

Question 12

Any point on the production possibility frontier is

Accepted Answer

A) attainable and might be allocatively inefficient. 
B) attainable and must be allocatively efficient. 
C) less production efficient than a point in the interior of the PPF. 
D) always allocatively efficient but might or might not be production efficient. 
E) always production efficient and always allocatively efficient. 
A) attainable and might be allocatively inefficient. 
B) attainable and must be allocatively efficient. 
C) less production efficient than a point in the interior of the PPF. 
D) always allocatively efficient but might or might not be production efficient. 
E) always production efficient and always allocatively efficient.

Question 13

If the price of a pizza is $10 per pizza, the consumer surplus from the first pizza consumed ________ the consumer surplus from the second pizza consumed.

Accepted Answer

A) is greater than 
B) equals 
C) is less than 
D) cannot be compared to 
E) None of the above answers is correct because more information is needed about the marginal cost of producing the pizzas to answer the question. 
A) is greater than 
B) equals 
C) is less than 
D) cannot be compared to 
E) None of the above answers is correct because more information is needed about the marginal cost of producing the pizzas to answer the question.

Question 14

As pointed out by the "big tradeoff," government action that redistributes incomes so that everyone has the same income leads to

Accepted Answer

A) fairness according to the "fair rules" approach. 
B) efficient markets. 
C) resources being allocated according to a command system. 
D) a smaller total output. 
E) lower taxes on the rich than on the poor so that the rich do not lose their incentive to work. 
A) fairness according to the "fair rules" approach. 
B) efficient markets. 
C) resources being allocated according to a command system. 
D) a smaller total output. 
E) lower taxes on the rich than on the poor so that the rich do not lose their incentive to work.

Question 15

The figure above shows the demand curve for pizza and the market price of pizza.
-In the figure above, what is the consumer surplus per day?

Accepted Answer

A) $100,000 
B) $50,000 
C) $125,000 
D) $150,000 
E) zero 
A) $100,000 
B) $50,000 
C) $125,000 
D) $150,000 
E) zero

Question 16

The fair rules approach to fairness requires

Accepted Answer

A) consumer surplus equals producer surplus. 
B) income transfers from rich to poor. 
C) property rights and voluntary exchange. 
D) that marginal cost equal marginal benefit. 
E) consumer surplus exceed producer surplus because there are more consumers than producers. 
A) consumer surplus equals producer surplus. 
B) income transfers from rich to poor. 
C) property rights and voluntary exchange. 
D) that marginal cost equal marginal benefit. 
E) consumer surplus exceed producer surplus because there are more consumers than producers.

Question 17

If the price of a visit to Sea World exceeds the marginal cost of the visit by $13, a producer surplus exists for Sea World." Is this statement true or false?

Accepted Answer

The statement is true. Anytime

Question 18

To achieve allocative efficiency, one must compare the

Accepted Answer

A) marginal cost of a good to its opportunity cost. 
B) opportunity cost to the attainable point on the production possibilities frontier. 
C) marginal benefit of a good to its marginal cost. 
D) marginal cost to the production efficiency cost. 
E) point of production efficiency to the point of allocative efficiency. 
A) marginal cost of a good to its opportunity cost. 
B) opportunity cost to the attainable point on the production possibilities frontier. 
C) marginal benefit of a good to its marginal cost. 
D) marginal cost to the production efficiency cost. 
E) point of production efficiency to the point of allocative efficiency.

Question 19

If you are willing to pay no more than $4 for a slice of pizza and the price of a slice of pizza is $4, then

Accepted Answer

A) if you buy it, you would be cheated because you would realize no total benefit from the purchase. 
B) you buy it but you get no marginal benefit from the purchase. 
C) you will not buy it. 
D) you buy it but you get no consumer surplus from the purchase. 
E) you might buy it depending on how the slice's marginal benefit compares to its price. 
A) if you buy it, you would be cheated because you would realize no total benefit from the purchase. 
B) you buy it but you get no marginal benefit from the purchase. 
C) you will not buy it. 
D) you buy it but you get no consumer surplus from the purchase. 
E) you might buy it depending on how the slice's marginal benefit compares to its price.

Question 20

The marginal benefit of a taco is measured by

Accepted Answer

A) the price of the taco. 
B) the amount of another good a person is willing to give up to get one more taco. 
C) the amount of another good a person must give up to get one more taco. 
D) a point on the PPF. 
E) the opportunity cost of producing another taco. 
A) the price of the taco. 
B) the amount of another good a person is willing to give up to get one more taco. 
C) the amount of another good a person must give up to get one more taco. 
D) a point on the PPF. 
E) the opportunity cost of producing another taco.

At a competitive equilibrium, if there are no taxes, subsidies, price regulations, quantity regulations, or externalities

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

The idea of the "big tradeoff" points out the costs of

Is the marginal benefit someone enjoys from a good or service the same as the price he or she pays? Explain your answer.

When the marginal benefit and marginal cost of sodas are equal, then

What is the "invisible hand"?

The "invisible hand" refers to the notion that

If one producer has control over an entire market and underproduces, the producer will

Mandy saved her allowance to buy a 12 pack of cream soda. When Mandy's brother saw the soda, he took four. Sodas were allocated between Mandy and her brother through

The figure above shows the supply curve for pizza and the market price of pizza. -In the figure above, the total revenue from pizza per day is

-In the above figure, if the market quantity is restricted to 500,000 and the price is allowed to rise to set the quantity demanded equal to the quantity supplied, then the producer surplus is equal to

Any point on the production possibility frontier is

If the price of a pizza is $10 per pizza, the consumer surplus from the first pizza consumed ________ the consumer surplus from the second pizza consumed.

As pointed out by the "big tradeoff," government action that redistributes incomes so that everyone has the same income leads to

The figure above shows the demand curve for pizza and the market price of pizza. -In the figure above, what is the consumer surplus per day?

The fair rules approach to fairness requires

If the price of a visit to Sea World exceeds the marginal cost of the visit by $13, a producer surplus exists for Sea World." Is this statement true or false?

To achieve allocative efficiency, one must compare the

If you are willing to pay no more than $4 for a slice of pizza and the price of a slice of pizza is $4, then

The marginal benefit of a taco is measured by

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

At a competitive equilibrium, if there are no taxes, subsidies, price regulations, quantity regulations, or externalities

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

The idea of the "big tradeoff" points out the costs of

Is the marginal benefit someone enjoys from a good or service the same as the price he or she pays? Explain your answer.

When the marginal benefit and marginal cost of sodas are equal, then

What is the "invisible hand"?

The "invisible hand" refers to the notion that

If one producer has control over an entire market and underproduces, the producer will

Mandy saved her allowance to buy a 12 pack of cream soda. When Mandy's brother saw the soda, he took four. Sodas were allocated between Mandy and her brother through

The figure above shows the supply curve for pizza and the market price of pizza. -In the figure above, the total revenue from pizza per day is

-In the above figure, if the market quantity is restricted to 500,000 and the price is allowed to rise to set the quantity demanded equal to the quantity supplied, then the producer surplus is equal to

Any point on the production possibility frontier is

If the price of a pizza is $10 per pizza, the consumer surplus from the first pizza consumed ________ the consumer surplus from the second pizza consumed.

As pointed out by the "big tradeoff," government action that redistributes incomes so that everyone has the same income leads to

The figure above shows the demand curve for pizza and the market price of pizza. -In the figure above, what is the consumer surplus per day?

The fair rules approach to fairness requires

If the price of a visit to Sea World exceeds the marginal cost of the visit by $13, a producer surplus exists for Sea World." Is this statement true or false?

To achieve allocative efficiency, one must compare the

If you are willing to pay no more than $4 for a slice of pizza and the price of a slice of pizza is $4, then

The marginal benefit of a taco is measured by

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