Exam 6: Markets, Maximizers, and Efficiency

Use the following to answer question(s): Marginal Benefits and Marginal Costs -(Exhibit: Marginal Benefits and Marginal Costs) In the exhibit, more time spent studying economics adds points to economics scores but subtracts points from accounting scores.The marginal benefit of studying economics when the student is at 2 hours is _______ points and the marginal cost is _______ points.

The best example of a common property resource is:

According to the Case in Point on wildlife and property rights:

Use the following to answer question(s): Surplus and Supply -(Exhibit: Surplus and Supply) At output level OE, the total costs to sellers is _______ , the total revenues to sellers is _______ , and the producer surplus is _______ .

Economists assume that firms seek to maximize:

When price signals reflect _______ benefits and _______ costs of choices, we expect that the allocation of resources will be _______ .

An external cost would cause _______ production of the good and may require a _______ to internalize the externality into the market.

Property rights are defined as a set of rules that:

If the marginal benefit received from a good is greater than the marginal cost of production, then:

Which of the following is a private good?

Making a statement about an equitable or inequitable distribution of income:

Public goods are goods for which the cost of exclusion is prohibitive.

To be effective in facilitating exchange, property rights must be:

An inefficient allocation of resources is one that does not maximize the net benefits of each activity.

Use the following to answer question(s): Market Failure 1 -(Exhibit: Market Failure 1) If the market produces quantity G, then:

When the net benefits of all economic activities are maximized, economists say the allocation of resources is _______ .

Water is an example of a public good.

Explain the approach through which decisionmakers can maximize the return from an activity.

Common property resources have never been a serious problem in the efficient allocation of resources.

A boundary that limits the range of choices an individual or a firm can make is: