Question 1

Suppose that external costs are not fully reflected in the market price of a good.This is an indication of market:

Accepted Answer

A)  failure. 
B)  equilibrium. 
C)  efficiency. 
D)  optimality. 
A)  failure. 
B)  equilibrium. 
C)  efficiency. 
D)  optimality.

Question 2

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

Accepted Answer

A)  marginal benefit is equal to marginal cost. 
B)  marginal benefit is less than marginal cost. 
C)  marginal benefit is greater than marginal cost. 
D)  price is equal to marginal cost and greater than marginal benefit. 
A)  marginal benefit is equal to marginal cost. 
B)  marginal benefit is less than marginal cost. 
C)  marginal benefit is greater than marginal cost. 
D)  price is equal to marginal cost and greater than marginal benefit.

Question 3

Suppose that the expected exam scores from studying economics for 0, 1, 2, or 3 hours are 65, 80, 90, and 95 points, respectively, while the expected exam scores for studying 0, 1, 2, or 3 hours of accounting are 50, 65, 70, and 70 points, respectively.With 3 total hours of study time, your combined scores can be maximized by spending _______ hours studying accounting.

Accepted Answer

A)  0 
B)  1 
C)  2 
D)  3 
A)  0 
B)  1 
C)  2 
D)  3

Question 4

The buffalo nearly became extinct because:

Accepted Answer

A)  buffalo hunters were evil and greedy. 
B)  the buffalo was stupid and did not know how to defend itself. 
C)  no one owned the buffalo. 
D)  the Sierra Club did not exist in the 1800s. 
A)  buffalo hunters were evil and greedy. 
B)  the buffalo was stupid and did not know how to defend itself. 
C)  no one owned the buffalo. 
D)  the Sierra Club did not exist in the 1800s.

Question 5

If a good that involves external costs is priced to take these costs into account, then its:

Accepted Answer

A)  price would fall and output would go up. 
B)  price would rise and output would fall. 
C)  price would not change but output would fall. 
D)  price would rise but output would stay the same. 
A)  price would fall and output would go up. 
B)  price would rise and output would fall. 
C)  price would not change but output would fall. 
D)  price would rise but output would stay the same.

Question 6

Economists assume that consumers seek to maximize:

Accepted Answer

A)  usefulness. 
B)  profit. 
C)  utility. 
D)  time. 
A)  usefulness. 
B)  profit. 
C)  utility. 
D)  time.

Question 7

A public good is a good or service for which exclusion:

Accepted Answer

A)  is possible and for which marginal cost of an additional user is zero. 
B)  is possible and for which marginal cost of an additional user is positive. 
C)  cannot be applied and for which marginal cost of an additional user is zero. 
D)  cannot be applied and for which marginal cost of an additional user is positive. 
A)  is possible and for which marginal cost of an additional user is zero. 
B)  is possible and for which marginal cost of an additional user is positive. 
C)  cannot be applied and for which marginal cost of an additional user is zero. 
D)  cannot be applied and for which marginal cost of an additional user is positive.

Question 8

A good for which no exclusive property rights exist is a:

Accepted Answer

A)  common property resource. 
B)  private good. 
C)  private resource. 
D)  social-private good. 
A)  common property resource. 
B)  private good. 
C)  private resource. 
D)  social-private good.

Question 9

An efficient allocation of resources implies _______ allocation of goods and services.

Accepted Answer

A)  an equitable 
B)  an inequitable 
C)  neither an equitable nor an inequitable 
D)  a maximum 
A)  an equitable 
B)  an inequitable 
C)  neither an equitable nor an inequitable 
D)  a maximum

Question 10

Market efficiency requires that property rights be exclusive and transferable.

Accepted Answer

A) True 
 B)False

Question 11

When the market does not result in an efficient allocation of scarce resources, economists call this:

Accepted Answer

A)  market dropout. 
B)  normative economics. 
C)  market disincentives. 
D)  market failure. 
A)  market dropout. 
B)  normative economics. 
C)  market disincentives. 
D)  market failure.

Question 12

Suppose that the expected exam scores from studying economics for 0, 1, 2, or 3 hours are 65, 80, 90, and 95 points, respectively, while the expected exam scores for studying 0, 1, 2, or 3 hours of accounting are 50, 65, 70, and 70 points, respectively.With 3 total hours of study time, the marginal benefit in terms of your economics score of spending the first hour studying economics is _______ points.

Accepted Answer

A)  5 
B)  10 
C)  15 
D)  20 
A)  5 
B)  10 
C)  15 
D)  20

Question 13

In our society, a good for which exclusion is possible is:

Accepted Answer

A)  infectious disease control. 
B)  courts of law. 
C)  naval defense. 
D)  municipal swimming pools. 
A)  infectious disease control. 
B)  courts of law. 
C)  naval defense. 
D)  municipal swimming pools.

Question 14

In the production of peanut butter, if Peanuts 'R' Us, Inc.discards broken peanut shells onto an adjacent recreational area, this situation will most likely lead to the market failure of:

Accepted Answer

A)  external cost. 
B)  deregulation. 
C)  monopoly power. 
D)  imperfect information. 
A)  external cost. 
B)  deregulation. 
C)  monopoly power. 
D)  imperfect information.

Question 15

Discuss and explain why and how demand and supply may not lead to the allocation of some resources to their best uses.

Accepted Answer

Demand and supply are fundamental concep

Question 16

If an activity generates external costs, the decisionmakers generating the activity will:

Accepted Answer

A)  be faced with its full costs. 
B)  be faced with no costs. 
C)  not be faced with its full costs. 
D)  be faced with excessive costs. 
A)  be faced with its full costs. 
B)  be faced with no costs. 
C)  not be faced with its full costs. 
D)  be faced with excessive costs.

Question 17

The market for apples achieves an efficient allocation of resources when prices respond and send signals to producers and consumers.That set of interactions requires that producers possess:

Accepted Answer

A)  lobby access to government. 
B)  monopoly power. 
C)  property rights to the apples they grow. 
D)  the ability to set any price they choose for their apples. 
A)  lobby access to government. 
B)  monopoly power. 
C)  property rights to the apples they grow. 
D)  the ability to set any price they choose for their apples.

Question 18

The free-rider problem is a direct result of:

Accepted Answer

A)  the inability to exclude nonpayers. 
B)  marginal-cost pricing. 
C)  full-cost pricing. 
D)  horizontally summed supply curves. 
A)  the inability to exclude nonpayers. 
B)  marginal-cost pricing. 
C)  full-cost pricing. 
D)  horizontally summed supply curves.

Question 19

The satisfaction consumers derive from their consumption of goods and services is:

Accepted Answer

A)  utility. 
B)  production. 
C)  efficiency. 
D)  profit. 
A)  utility. 
B)  production. 
C)  efficiency. 
D)  profit.

Question 20

The best example of a common property resource is:

Accepted Answer

A)  the electromagnetic spectrum. 
B)  transportation. 
C)  automobiles. 
D)  clothing. 
A)  the electromagnetic spectrum. 
B)  transportation. 
C)  automobiles. 
D)  clothing.

Suppose that external costs are not fully reflected in the market price of a good.This is an indication of market:

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

The buffalo nearly became extinct because:

If a good that involves external costs is priced to take these costs into account, then its:

Economists assume that consumers seek to maximize:

A public good is a good or service for which exclusion:

A good for which no exclusive property rights exist is a:

An efficient allocation of resources implies _______ allocation of goods and services.

Market efficiency requires that property rights be exclusive and transferable.

When the market does not result in an efficient allocation of scarce resources, economists call this:

In our society, a good for which exclusion is possible is:

In the production of peanut butter, if Peanuts 'R' Us, Inc.discards broken peanut shells onto an adjacent recreational area, this situation will most likely lead to the market failure of:

Discuss and explain why and how demand and supply may not lead to the allocation of some resources to their best uses.

If an activity generates external costs, the decisionmakers generating the activity will:

The market for apples achieves an efficient allocation of resources when prices respond and send signals to producers and consumers.That set of interactions requires that producers possess:

The free-rider problem is a direct result of:

The satisfaction consumers derive from their consumption of goods and services is:

The best example of a common property resource 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

Suppose that external costs are not fully reflected in the market price of a good.This is an indication of market:

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

The buffalo nearly became extinct because:

If a good that involves external costs is priced to take these costs into account, then its:

Economists assume that consumers seek to maximize:

A public good is a good or service for which exclusion:

A good for which no exclusive property rights exist is a:

An efficient allocation of resources implies _______ allocation of goods and services.

Market efficiency requires that property rights be exclusive and transferable.

When the market does not result in an efficient allocation of scarce resources, economists call this:

In our society, a good for which exclusion is possible is:

In the production of peanut butter, if Peanuts 'R' Us, Inc.discards broken peanut shells onto an adjacent recreational area, this situation will most likely lead to the market failure of:

Discuss and explain why and how demand and supply may not lead to the allocation of some resources to their best uses.

If an activity generates external costs, the decisionmakers generating the activity will:

The market for apples achieves an efficient allocation of resources when prices respond and send signals to producers and consumers.That set of interactions requires that producers possess:

The free-rider problem is a direct result of:

The satisfaction consumers derive from their consumption of goods and services is:

The best example of a common property resource 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