Question 1

The value of a slice of pizza to a consumer is equal to

Accepted Answer

A) its marginal benefit. 
B) the maximum price the consumer is willing to pay. 
C) the consumer surplus. 
D) Both answers A and B are correct. 
E) Both answers B and C are correct. 
A) its marginal benefit. 
B) the maximum price the consumer is willing to pay. 
C) the consumer surplus. 
D) Both answers A and B are correct. 
E) Both answers B and C are correct.

Question 2

Allocative efficiency refers to

Accepted Answer

A) producing the goods and services most highly valued. 
B) using the least amount of labor to produce output. 
C) producing the maximum possible amount of output. 
D) obtaining the least output with the most inputs. 
E) producing at any point on the PPF. 
A) producing the goods and services most highly valued. 
B) using the least amount of labor to produce output. 
C) producing the maximum possible amount of output. 
D) obtaining the least output with the most inputs. 
E) producing at any point on the PPF.

Question 3

Which of the following is part of the cost of income transfers?

Accepted Answer

A) Tax-collecting agencies cost money to administer. 
B) Taxing incomes encourages people to work harder. 
C) Income transfers make the results more unfair. 
D) Income transfers increase the size of the economic pie. 
E) Income transfers are a similar to allocating resources using a lottery. 
A) Tax-collecting agencies cost money to administer. 
B) Taxing incomes encourages people to work harder. 
C) Income transfers make the results more unfair. 
D) Income transfers increase the size of the economic pie. 
E) Income transfers are a similar to allocating resources using a lottery.

Question 4

A supply curve shows the ________ of producing one more unit of a good or service.

Accepted Answer

A) producer surplus 
B) consumer surplus 
C) total benefit 
D) marginal cost 
E) marginal benefit to the producer 
A) producer surplus 
B) consumer surplus 
C) total benefit 
D) marginal cost 
E) marginal benefit to the producer

Question 5

Samantha was willing to pay $10 for a hamburger because she was hungry but she only paid $2.50. What is the marginal benefit Samantha gained from the hamburger?

Accepted Answer

A) $2.50 
B) $7.50 
C) $10.00 
D) $12.50 
E) None of the above answers is correct. 
A) $2.50 
B) $7.50 
C) $10.00 
D) $12.50 
E) None of the above answers is correct.

Question 6

Jason wants to hire Maria to tutor him in economics. Jason is willing to pay $30 for the first hour of tutoring, $25 for the second, $20 for the third, $15 for the fourth, and $10 for the fifth. Maria has an opportunity cost per hour of $6 for the first, $9 for the second, $12 for the third, $15 for the fourth, and $18 for the fifth. The initial equilibrium price for tutoring is $15 an hour and hence Maria tutors Jason for 4 hours. Now, Maria realizes that she is the only economics tutor because all the other tutors have graduated. Because she is the only tutor, she has a monopoly and, as a monopolist, Maria decides to charge a price of $25 instead of $15 an hour.
a. At the price of $25 an hour, how many hours will Maria tutor Jason?
b. At the initial equilibrium price of $15 an hour, what was Jason's total consumer surplus and Maria's total producer surplus?
c. At the price of $25 an hour, how many hours will Jason hire Maria to tutor him?
 What is Jason's total consumer surplus and Maria's total producer surplus?
d. How does the sum of Jason's consumer surplus plus Maria's producer surplus compare at the initial equilibrium price of $15 an hour (part b)and at the new price of $25 an hour (part c)?
 Comment on any difference.

Accepted Answer

a. Maria will tutor Jason for 2 hours.
b

Question 7

6.7 Integrative Questions
  
-The figure above shows the market for brooms. If 800 brooms are produced,

Accepted Answer

A) marginal cost exceeds marginal benefit. 
B) a deadweight loss does not occur because everyone who wants to buy a broom can. 
C) the "big tradeoff" occurs. 
D) value exceeds price. 
E) the "fair results" approach to fairness is definitely not violated. 
A) marginal cost exceeds marginal benefit. 
B) a deadweight loss does not occur because everyone who wants to buy a broom can. 
C) the "big tradeoff" occurs. 
D) value exceeds price. 
E) the "fair results" approach to fairness is definitely not violated.

Question 8

-Bill and Krista sell potted plants from a roadside stand. The figure above shows Bill and Krista's marginal cost curve and the market price. If Bill and Krista sell 60 plants per week, their producer surplus from the 60th plant will equal

Accepted Answer

A) $8. 
B) $480. 
C) $0. 
D) $20. 
E) More information is needed to answer the question. 
A) $8. 
B) $480. 
C) $0. 
D) $20. 
E) More information is needed to answer the question.

Question 9

The concept of "the invisible hand" suggests that markets

Accepted Answer

A) do not produce the efficient quantity. 
B) are always fair. 
C) produce the efficient quantity. 
D) are unfair. 
E) allocate resources unfairly and inefficiently. 
A) do not produce the efficient quantity. 
B) are always fair. 
C) produce the efficient quantity. 
D) are unfair. 
E) allocate resources unfairly and inefficiently.

Question 10

-The figure above shows the supply curve for soda. The market price is $1.00 per soda. The producer surplus from the 10,000th 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 11

Moving ________ along the marginal cost curve, the ________.

Accepted Answer

A) upward; opportunity cost of one more unit increases 
B) upward; marginal cost decreases 
C) downward; marginal cost increases 
D) upward; opportunity cost of one more unit does not change 
E) downward; opportunity cost of one more unit does not change 
A) upward; opportunity cost of one more unit increases 
B) upward; marginal cost decreases 
C) downward; marginal cost increases 
D) upward; opportunity cost of one more unit does not change 
E) downward; opportunity cost of one more unit does not change

Question 12

If marginal benefit is equal to marginal cost, then the

Accepted Answer

A) producer surplus is equal to the consumer surplus. 
B) sum of producer surplus and consumer surplus is as large as possible. 
C) sum of producer surplus and consumer surplus equals zero. 
D) market has squeezed out total surplus so that it equals zero. 
E) deadweight loss is more than zero but less than its maximum. 
A) producer surplus is equal to the consumer surplus. 
B) sum of producer surplus and consumer surplus is as large as possible. 
C) sum of producer surplus and consumer surplus equals zero. 
D) market has squeezed out total surplus so that it equals zero. 
E) deadweight loss is more than zero but less than its maximum.

Question 13

The figure above shows the demand curve for pizza and the market price of pizza.
-In the figure above, how much do the consumers pay in total for the quantity of pizza they buy per day?

Accepted Answer

A) $100,000 
B) $150,000 
C) $125,000 
D) $50,000 
E) None of the above answers is correct. 
A) $100,000 
B) $150,000 
C) $125,000 
D) $50,000 
E) None of the above answers is correct.

Question 14

What approach to fairness argues in favor of government policies that redistribute income so that there is more equality of income?

Accepted Answer

The general approach to fairness that ar

Question 15

Which of the following is most closely related to the "fair results" approach to fairness?

Accepted Answer

A) efficient resource use 
B) having an equal income distribution 
C) voluntary exchange 
D) the command system of allocating resources 
E) price hikes in a natural disaster 
A) efficient resource use 
B) having an equal income distribution 
C) voluntary exchange 
D) the command system of allocating resources 
E) price hikes in a natural disaster

Question 16

Jenn is willing to pay $75 for a purse and the purse's price is $60. What is Jenn's consumer surplus on this purse?

Accepted Answer

The consumer surplus equals the differen

Question 17

When less than the efficient amount of a good is produced, how does the marginal benefit of the last unit produced compare to its marginal cost?

Accepted Answer

When less than the efficient amount of a

Question 18

What must be true for a consumer to buy a good or service?

Accepted Answer

A) The price must be equal to or less than the marginal benefit. 
B) The total benefit received must equal the total spent to buy the good or service. 
C) The consumer must be able to obtain some consumer surplus. 
D) The consumer must not be able to produce the product. 
E) The price must be equal to or greater than the marginal benefit. 
A) The price must be equal to or less than the marginal benefit. 
B) The total benefit received must equal the total spent to buy the good or service. 
C) The consumer must be able to obtain some consumer surplus. 
D) The consumer must not be able to produce the product. 
E) The price must be equal to or greater than the marginal benefit.

Question 19

The idea that unequal incomes is unfair generally uses the ________ principle of fairness.

Accepted Answer

A) big tradeoff 
B) involuntary exchange 
C) voluntary exchange 
D) it's not fair if the result isn't fair 
E) it's not fair if the rules aren't fair 
A) big tradeoff 
B) involuntary exchange 
C) voluntary exchange 
D) it's not fair if the result isn't fair 
E) it's not fair if the rules aren't fair

Question 20

Suppose the price of a scooter is $200 and Cora Lee is willing to pay $250. Cora Lee's

Accepted Answer

A) consumer surplus from that scooter is $200. 
B) consumer surplus from that scooter is $50. 
C) marginal benefit from that scooter is $100. 
D) consumer surplus from that scooter is $150. 
E) consumer surplus from that scooter is $250. 
A) consumer surplus from that scooter is $200. 
B) consumer surplus from that scooter is $50. 
C) marginal benefit from that scooter is $100. 
D) consumer surplus from that scooter is $150. 
E) consumer surplus from that scooter is $250.

The value of a slice of pizza to a consumer is equal to

Allocative efficiency refers to

Which of the following is part of the cost of income transfers?

A supply curve shows the ________ of producing one more unit of a good or service.

Samantha was willing to pay $10 for a hamburger because she was hungry but she only paid $2.50. What is the marginal benefit Samantha gained from the hamburger?

6.7 Integrative Questions -The figure above shows the market for brooms. If 800 brooms are produced,

-Bill and Krista sell potted plants from a roadside stand. The figure above shows Bill and Krista's marginal cost curve and the market price. If Bill and Krista sell 60 plants per week, their producer surplus from the 60th plant will equal

The concept of "the invisible hand" suggests that markets

-The figure above shows the supply curve for soda. The market price is $1.00 per soda. The producer surplus from the 10,000th soda is

Moving along the marginal cost curve, the .

If marginal benefit is equal to marginal cost, then the

The figure above shows the demand curve for pizza and the market price of pizza. -In the figure above, how much do the consumers pay in total for the quantity of pizza they buy per day?

What approach to fairness argues in favor of government policies that redistribute income so that there is more equality of income?

Which of the following is most closely related to the "fair results" approach to fairness?

Jenn is willing to pay $75 for a purse and the purse's price is $60. What is Jenn's consumer surplus on this purse?

When less than the efficient amount of a good is produced, how does the marginal benefit of the last unit produced compare to its marginal cost?

What must be true for a consumer to buy a good or service?

The idea that unequal incomes is unfair generally uses the ________ principle of fairness.

Suppose the price of a scooter is $200 and Cora Lee is willing to pay $250. Cora Lee's

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 value of a slice of pizza to a consumer is equal to

Allocative efficiency refers to

Which of the following is part of the cost of income transfers?

A supply curve shows the ________ of producing one more unit of a good or service.

Samantha was willing to pay $10 for a hamburger because she was hungry but she only paid $2.50. What is the marginal benefit Samantha gained from the hamburger?

6.7 Integrative Questions -The figure above shows the market for brooms. If 800 brooms are produced,

-Bill and Krista sell potted plants from a roadside stand. The figure above shows Bill and Krista's marginal cost curve and the market price. If Bill and Krista sell 60 plants per week, their producer surplus from the 60th plant will equal

The concept of "the invisible hand" suggests that markets

-The figure above shows the supply curve for soda. The market price is $1.00 per soda. The producer surplus from the 10,000th soda is

Moving ________ along the marginal cost curve, the ________.

If marginal benefit is equal to marginal cost, then the

The figure above shows the demand curve for pizza and the market price of pizza. -In the figure above, how much do the consumers pay in total for the quantity of pizza they buy per day?

What approach to fairness argues in favor of government policies that redistribute income so that there is more equality of income?

Which of the following is most closely related to the "fair results" approach to fairness?

Jenn is willing to pay $75 for a purse and the purse's price is $60. What is Jenn's consumer surplus on this purse?

When less than the efficient amount of a good is produced, how does the marginal benefit of the last unit produced compare to its marginal cost?

What must be true for a consumer to buy a good or service?

The idea that unequal incomes is unfair generally uses the ________ principle of fairness.

Suppose the price of a scooter is $200 and Cora Lee is willing to pay $250. Cora Lee's

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

Moving along the marginal cost curve, the .