Exam 5: Efficiency and Equity

-The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. What is the efficient quantity of chocolate to produce each day?

Which of the following can prevent markets from reaching the efficient level of production? I. a monopoly II) taxes III) the product is a public good

Suppose there are four firms that are each willing to sell one unit of a good. Each firm has a different minimum price that they are willing to sell for: Firm A $6, Firm B $7, Firm C $10, and Firm D $12. If the market price is $11, then the total producer surplus is

-In the above figure, at the efficient quantity of CDs

A market demand curve measures

-In the above figure, 300,000 purses per month is

If a person will rent an apartment only to married couples over 30 years old, that person is allocating resources using a ________ allocation method.

The supply curve for CDs shows the

-In the above figure, if the price is $2, then the total consumer surplus is

One problem with the utilitarian principle is that it ignores

________ is the value of a good minus the price paid for it summed over the quantity bought.

-The figure above shows the market for milk. The ________ price that producers must be offered to get them to produce 100 gallons of milk per day is ________.

-The figure shows the demand curve for hotel rooms at a local resort. a) If the hotel charges $120 per night, how many rooms will they rent? b) If there are only 40 rooms available, how much are customers willing to pay for a room? c) If 60 rooms are available, how much are customers willing to pay? d) What do the dollars in your answer to part (c) represent?

-What area in the above figure is the consumer surplus at the efficient quantity?

Although the efficient quantity to produce of any good is located where marginal social benefit and marginal social cost are equal, there will usually be other quantities where the sum of consumer and producer surplus are greater.

Which of the following can prevent markets from reaching efficiency? I. decreasing marginal benefit II) taxes III) quantity regulations that limit the quantity that may be produced

-In the above figure, of the quantities listed below, for which is the total deadweight loss the largest?

-The figure above shows the market for milk. If a drought lowers the productivity of dairy cows so that they give less milk, then the efficient quantity of milk ________ and the consumer surplus ________.

The market supply curve is also the

-The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. Producing and consuming the efficient quantity of coffee in Kaffenia means that