Question 1

Property rights are a set of rules that specify the ways in which the resource for which they are defined may be used.

Accepted Answer

A) True 
 B)False

Question 2

It can be inferred that when firms and consumers respond to changing price signals in a competitive market with well-defined and transferable property rights:

Accepted Answer

A)  they will achieve the efficient solution in the marketplace. 
B)  they will rarely achieve the efficient solution given flexible prices. 
C)  they will, in the real world, seldom act according to marginal benefit and marginal cost analysis. 
D)  there will generally be a shortage of apples, because they are scarce. 
A)  they will achieve the efficient solution in the marketplace. 
B)  they will rarely achieve the efficient solution given flexible prices. 
C)  they will, in the real world, seldom act according to marginal benefit and marginal cost analysis. 
D)  there will generally be a shortage of apples, because they are scarce.

Question 3

Use the following to answer question(s): Markets and Efficiency
  
-(Exhibit: Markets and Efficiency) The price and marginal cost in Panel(a) are equal because of:

Accepted Answer

A)  the marginal decision rule. 
B)  the law of demand. 
C)  the law of supply. 
D)  the law of increasing cost. 
A)  the marginal decision rule. 
B)  the law of demand. 
C)  the law of supply. 
D)  the law of increasing cost.

Question 4

Use the following to answer question(s): Model of a Competitive Market
  
-(Exhibit: Model of a Competitive Market) If there are external costs, a tax imposed on sellers will:

Accepted Answer

A)  decrease the equilibrium quantity. 
B)  increase the equilibrium quantity. 
C)  have no effect on the equilibrium price. 
D)  decrease the equilibrium price. 
A)  decrease the equilibrium quantity. 
B)  increase the equilibrium quantity. 
C)  have no effect on the equilibrium price. 
D)  decrease the equilibrium price.

Question 5

Free riders consume a public good without paying for it.

Accepted Answer

A) True 
 B)False

Question 6

The net gain of an activity will be minimized at the point at which the MB equals the MC of the activity.

Accepted Answer

A) True 
 B)False

Question 7

Buffalo nearly became extinct despite efforts to stop buffalo hunters from pursuing them.They are now no longer endangered.Explain how barbed wire and the eventual ownership of buffalo have resulted in buffalo being raised much like cattle today.

Accepted Answer

Barbed wire played a significant role in

Question 8

Use the following to answer question(s): Surplus and Demand
  
-(Exhibit: Surplus and Demand) The total benefit of consuming OE units is given by the area:

Accepted Answer

A)  OCDE. 
B)  OBDE. 
C)  BCD. 
D)  OEDB. 
A)  OCDE. 
B)  OBDE. 
C)  BCD. 
D)  OEDB.

Question 9

Use the following to answer question(s): Markets and Efficiency
  
-(Exhibit: Markets and Efficiency) Refer to Panel (c).Given the shift in supply from S₁ to S₂, which of the following statements is (are) true?

Accepted Answer

A)  The rising price tells consumers that the marginal benefit of apples is falling. 
B)  The marginal benefit of consuming the same amount of apples at a higher price is more than the marginal costs. 
C)  Consumers cut back on their consumption of apples. 
D)  All of the above are true. 
A)  The rising price tells consumers that the marginal benefit of apples is falling. 
B)  The marginal benefit of consuming the same amount of apples at a higher price is more than the marginal costs. 
C)  Consumers cut back on their consumption of apples. 
D)  All of the above are true.

Question 10

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.When the student studies economics for 4 hours, the marginal benefit is _______ ; when the student studies for 6 hours, the marginal benefit is _______.

Accepted Answer

A)  20; 10 
B)  30; 10 
C)  20; 0 
D)  20; 30 
A)  20; 10 
B)  30; 10 
C)  20; 0 
D)  20; 30

Question 11

Use the following for questions 55-59.
Exhibit: Marginal Benefit, Marginal Cost, and Net Benefit
  
-(Exhibit: Marginal Benefit, Marginal Cost, and Net Benefit) In Panel (b), if the activity level is at E, then there will be a deadweight loss shown by the area:

Accepted Answer

A)  EGC. 
B)  FGC. 
C)  ABC. 
D)  AFE. 
A)  EGC. 
B)  FGC. 
C)  ABC. 
D)  AFE.

Question 12

When the net benefits of all economic activities are not maximized, economists say the allocation of resources is _______ .

Accepted Answer

A)  inefficient 
B)  incorrect 
C)  efficient 
D)  poorly done 
A)  inefficient 
B)  incorrect 
C)  efficient 
D)  poorly done

Question 13

Use the following for questions 111-115.
    
-(Exhibit: The Demand for Golf Balls) Assume that 5 dozen golf balls are purchased for $10 per dozen.Consumer surplus is:

Accepted Answer

A)  $1. 
B)  $4. 
C)  $9. 
D)  $25. 
A)  $1. 
B)  $4. 
C)  $9. 
D)  $25.

Question 14

People or firms who consume a public good without paying for them are called _______ by economists.

Accepted Answer

A)  deadbeats 
B)  free riders 
C)  public consumers 
D)  tax evaders 
A)  deadbeats 
B)  free riders 
C)  public consumers 
D)  tax evaders

Question 15

What are the roles government might play in attempting to correct the misallocation of resources in the market economy.

Accepted Answer

The government can play several roles in

Question 16

Net benefit can be maximized by finding the greatest difference between:

Accepted Answer

A)  total benefit and total cost. 
B)  marginal benefit and marginal cost. 
C)  marginal benefit and total cost. 
D)  total benefit and marginal cost. 
A)  total benefit and total cost. 
B)  marginal benefit and marginal cost. 
C)  marginal benefit and total cost. 
D)  total benefit and marginal cost.

Question 17

Use the following to answer question(s): Market Failure 1
  
-(Exhibit: Market Failure 1) A competitive market, free of market failures, will achieve an equilibrium price _______ and an equilibrium quantity _______ .

Accepted Answer

A)  0A; 0E 
B)  0A; 0G 
C)  0B; 0F 
D)  0C; 0E 
A)  0A; 0E 
B)  0A; 0G 
C)  0B; 0F 
D)  0C; 0E

Question 18

Market failure occurs because market participants face the full costs and benefits of their choices.

Accepted Answer

A) True 
 B)False

Question 19

For markets to operate efficiently, it is necessary that private marginal cost:

Accepted Answer

A)  be equal to output quantity. 
B)  equal the cost of output. 
C)  plus external cost be equal to output price. 
D)  minus external cost be equal to output price. 
A)  be equal to output quantity. 
B)  equal the cost of output. 
C)  plus external cost be equal to output price. 
D)  minus external cost be equal to output price.

Question 20

Use the following to answer question(s): Markets and Efficiency
  
-(Exhibit: Markets and Efficiency) The equilibrium price in Panel (a) tells us that the marginal cost of a pound of apples is:

Accepted Answer

A)  less than $0.80. 
B)  equal to $0.80. 
C)  greater than $0.80. 
D)  equal to the average cost of producing apples. 
A)  less than $0.80. 
B)  equal to $0.80. 
C)  greater than $0.80. 
D)  equal to the average cost of producing apples.

Property rights are a set of rules that specify the ways in which the resource for which they are defined may be used.

It can be inferred that when firms and consumers respond to changing price signals in a competitive market with well-defined and transferable property rights:

Use the following to answer question(s): Markets and Efficiency -(Exhibit: Markets and Efficiency) The price and marginal cost in Panel(a) are equal because of:

Use the following to answer question(s): Model of a Competitive Market -(Exhibit: Model of a Competitive Market) If there are external costs, a tax imposed on sellers will:

Free riders consume a public good without paying for it.

The net gain of an activity will be minimized at the point at which the MB equals the MC of the activity.

Buffalo nearly became extinct despite efforts to stop buffalo hunters from pursuing them.They are now no longer endangered.Explain how barbed wire and the eventual ownership of buffalo have resulted in buffalo being raised much like cattle today.

Use the following to answer question(s): Surplus and Demand -(Exhibit: Surplus and Demand) The total benefit of consuming OE units is given by the area:

Use the following to answer question(s): Markets and Efficiency -(Exhibit: Markets and Efficiency) Refer to Panel (c).Given the shift in supply from S₁ to S₂, which of the following statements is (are) true?

Use the following for questions 55-59. Exhibit: Marginal Benefit, Marginal Cost, and Net Benefit -(Exhibit: Marginal Benefit, Marginal Cost, and Net Benefit) In Panel (b), if the activity level is at E, then there will be a deadweight loss shown by the area:

When the net benefits of all economic activities are not maximized, economists say the allocation of resources is _______ .

Use the following for questions 111-115. -(Exhibit: The Demand for Golf Balls) Assume that 5 dozen golf balls are purchased for $10 per dozen.Consumer surplus is:

People or firms who consume a public good without paying for them are called _______ by economists.

What are the roles government might play in attempting to correct the misallocation of resources in the market economy.

Net benefit can be maximized by finding the greatest difference between:

Use the following to answer question(s): Market Failure 1 -(Exhibit: Market Failure 1) A competitive market, free of market failures, will achieve an equilibrium price _ and an equilibrium quantity _ .

Market failure occurs because market participants face the full costs and benefits of their choices.

For markets to operate efficiently, it is necessary that private marginal cost:

Use the following to answer question(s): Markets and Efficiency -(Exhibit: Markets and Efficiency) The equilibrium price in Panel (a) tells us that the marginal cost of a pound of apples is:

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

Exam 6: Markets, Maximizers, and Efficiency

Property rights are a set of rules that specify the ways in which the resource for which they are defined may be used.

It can be inferred that when firms and consumers respond to changing price signals in a competitive market with well-defined and transferable property rights:

Use the following to answer question(s): Markets and Efficiency -(Exhibit: Markets and Efficiency) The price and marginal cost in Panel(a) are equal because of:

Use the following to answer question(s): Model of a Competitive Market -(Exhibit: Model of a Competitive Market) If there are external costs, a tax imposed on sellers will:

Free riders consume a public good without paying for it.

The net gain of an activity will be minimized at the point at which the MB equals the MC of the activity.

Buffalo nearly became extinct despite efforts to stop buffalo hunters from pursuing them.They are now no longer endangered.Explain how barbed wire and the eventual ownership of buffalo have resulted in buffalo being raised much like cattle today.

Use the following to answer question(s): Surplus and Demand -(Exhibit: Surplus and Demand) The total benefit of consuming OE units is given by the area:

Use the following to answer question(s): Markets and Efficiency -(Exhibit: Markets and Efficiency) Refer to Panel (c).Given the shift in supply from S₁ to S₂, which of the following statements is (are) true?

Use the following for questions 55-59. Exhibit: Marginal Benefit, Marginal Cost, and Net Benefit -(Exhibit: Marginal Benefit, Marginal Cost, and Net Benefit) In Panel (b), if the activity level is at E, then there will be a deadweight loss shown by the area:

When the net benefits of all economic activities are not maximized, economists say the allocation of resources is _______ .

Use the following for questions 111-115. -(Exhibit: The Demand for Golf Balls) Assume that 5 dozen golf balls are purchased for $10 per dozen.Consumer surplus is:

People or firms who consume a public good without paying for them are called _______ by economists.

What are the roles government might play in attempting to correct the misallocation of resources in the market economy.

Net benefit can be maximized by finding the greatest difference between:

Use the following to answer question(s): Market Failure 1 -(Exhibit: Market Failure 1) A competitive market, free of market failures, will achieve an equilibrium price _______ and an equilibrium quantity _______ .

Market failure occurs because market participants face the full costs and benefits of their choices.

For markets to operate efficiently, it is necessary that private marginal cost:

Use the following to answer question(s): Markets and Efficiency -(Exhibit: Markets and Efficiency) The equilibrium price in Panel (a) tells us that the marginal cost of a pound of apples is:

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

Use the following to answer question(s): Market Failure 1 -(Exhibit: Market Failure 1) A competitive market, free of market failures, will achieve an equilibrium price _ and an equilibrium quantity _ .