Question 1

In economics the assumption is made that consumers and firms will make choices that maximize(s) the _______ of each activity.

Accepted Answer

A)  net benefit 
B)  total benefit 
C)  sum of total benefit and total cost 
D)  product of total benefit and total cost 
A)  net benefit 
B)  total benefit 
C)  sum of total benefit and total cost 
D)  product of total benefit and total cost

Question 2

Use the following to answer question(s): Markets and Efficiency
  
-(Exhibit: Markets and Efficiency) Referring to Panel (a):

Accepted Answer

A)  at the equilibrium price of $0.80, marginal benefit exceeds marginal cost. 
B)  net benefit is minimized at the price of $0.80. 
C)  the equilibrium quantity, determined by demand and supply, is efficient. 
D)  total cost and total benefit are maximized. 
A)  at the equilibrium price of $0.80, marginal benefit exceeds marginal cost. 
B)  net benefit is minimized at the price of $0.80. 
C)  the equilibrium quantity, determined by demand and supply, is efficient. 
D)  total cost and total benefit are maximized.

Question 3

Common property resources tend to be _______ through markets.

Accepted Answer

A)  overpriced 
B)  efficiently priced 
C)  overconsumed 
D)  underconsumed 
A)  overpriced 
B)  efficiently priced 
C)  overconsumed 
D)  underconsumed

Question 4

Which of the following is not a public good?

Accepted Answer

A)  flood control provision 
B)  police protection 
C)  a lighthouse 
D)  postal services 
A)  flood control provision 
B)  police protection 
C)  a lighthouse 
D)  postal services

Question 5

Use the following for questions 111-115.
    
-(Exhibit: The Demand for Golf Balls) Assume that 1 dozen golf balls are purchased for $18 per dozen.Consumer surplus is:

Accepted Answer

A)  $1. 
B)  $4. 
C)  $9. 
D)  $16. 
A)  $1. 
B)  $4. 
C)  $9. 
D)  $16.

Question 6

An _______ results from any action that imposes costs on others outside of any market exchange.

Accepted Answer

A)  internal cost 
B)  outside cost 
C)  external cost 
D)  endogenous cost 
A)  internal cost 
B)  outside cost 
C)  external cost 
D)  endogenous cost

Question 7

Use the following to answer question(s): Markets and Efficiency
  
-(Exhibit: Markets and Efficiency) Using Panel (a), which of the following statements is (are) true?

Accepted Answer

A)  Consumers face a price that bears no relation to marginal cost. 
B)  Consumers face a price of apples that signals their marginal cost. 
C)  Consumers will buy apples as long as their marginal cost exceeds their marginal benefits. 
D)  All of the above statements are true. 
A)  Consumers face a price that bears no relation to marginal cost. 
B)  Consumers face a price of apples that signals their marginal cost. 
C)  Consumers will buy apples as long as their marginal cost exceeds their marginal benefits. 
D)  All of the above statements are true.

Question 8

To say that individuals maximize is illustrated by saying:

Accepted Answer

A)  they pick some objective and then seek to make the value of that objective as great as they can. 
B)  a sprinter wants to be as fast as possible. 
C)  a businessperson wants to earn the highest level of profit attainable. 
D)  all of the above. 
A)  they pick some objective and then seek to make the value of that objective as great as they can. 
B)  a sprinter wants to be as fast as possible. 
C)  a businessperson wants to earn the highest level of profit attainable. 
D)  all of the above.

Question 9

Economists assume that consumers attempt to maximize utility.

Accepted Answer

A) True 
 B)False

Question 10

An example of a public good is:

Accepted Answer

A)  a state university. 
B)  food. 
C)  fire protection. 
D)  the Ramada Inn. 
A)  a state university. 
B)  food. 
C)  fire protection. 
D)  the Ramada Inn.

Question 11

Use the following to answer question(s): Marginal Benefits and Marginal Costs
  
-(Exhibit: Marginal Benefits and Marginal Costs) The marginal benefit of studying economics when the student is at 4 hours is _______ points and the marginal cost is ________ points.

Accepted Answer

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

Question 12

The market will respond _______ to the preferences of a wealthy person as/than a poor one.

Accepted Answer

A)  the same 
B)  more 
C)  less 
D)  less equitably 
A)  the same 
B)  more 
C)  less 
D)  less equitably

Question 13

Private firms would be unlikely to attempt to produce the service of fending off incoming asteroids because:

Accepted Answer

A)  it would be expensive. 
B)  no one cares about asteroids. 
C)  such a service would be a public good. 
D)  asteroids are protected by international law. 
A)  it would be expensive. 
B)  no one cares about asteroids. 
C)  such a service would be a public good. 
D)  asteroids are protected by international law.

Question 14

Market efficiency requires exclusive, but not transferable, property rights.

Accepted Answer

A) True 
 B)False

Question 15

According to the marginal decision rule, if marginal benefit:

Accepted Answer

A)  exceeds marginal cost, an activity should be increased. 
B)  is less than marginal cost, an activity should be increased. 
C)  is equal to marginal cost, an activity should be increased. 
D)  exceeds marginal cost, net benefit is maximized. 
A)  exceeds marginal cost, an activity should be increased. 
B)  is less than marginal cost, an activity should be increased. 
C)  is equal to marginal cost, an activity should be increased. 
D)  exceeds marginal cost, net benefit is maximized.

Question 16

Discuss and explain the role of property rights in an exchange economy.Explain the two characteristics property rights must have if efficient exchange is to take place.

Accepted Answer

Property rights play a crucial role in a

Question 17

The definition of a public good or private good depends on the _______ of the good and not on whether it is provided by the _______ or _______ sector.

Accepted Answer

A)  characteristics; nonprofit; private 
B)  characteristics; public; private 
C)  supplier; market; public 
D)  characteristics; private; foreign 
A)  characteristics; nonprofit; private 
B)  characteristics; public; private 
C)  supplier; market; public 
D)  characteristics; private; foreign

Question 18

A copper mining operation discharges waste products into a river and causes higher costs and discomfort to downstream users of the water.In this case:

Accepted Answer

A)  too few of society's resources are being used to produce copper. 
B)  too many of society's resources are being used to produce copper. 
C)  the ideal amount of society's resources are being used to produce copper. 
D)  there is an external benefit to society from copper production. 
A)  too few of society's resources are being used to produce copper. 
B)  too many of society's resources are being used to produce copper. 
C)  the ideal amount of society's resources are being used to produce copper. 
D)  there is an external benefit to society from copper production.

Question 19

If the marginal benefit received from a good is equal to the marginal cost of production, then:

Accepted Answer

A)  society's well-being can be improved if production increases. 
B)  society's well-being can be improved if production decreases. 
C)  the market is producing too much of the good. 
D)  the market is producing an efficient quantity. 
A)  society's well-being can be improved if production increases. 
B)  society's well-being can be improved if production decreases. 
C)  the market is producing too much of the good. 
D)  the market is producing an efficient quantity.

Question 20

Use the following to answer question(s): Model of a Competitive Market
  
-(Exhibit: Model of a Competitive Market) If there are no external benefits or costs, the output at Q will be:

Accepted Answer

A)  larger than is socially desirable. 
B)  smaller than is socially desirable. 
C)  efficient. 
D)  inefficient. 
A)  larger than is socially desirable. 
B)  smaller than is socially desirable. 
C)  efficient. 
D)  inefficient.

In economics the assumption is made that consumers and firms will make choices that maximize(s) the _______ of each activity.

Use the following to answer question(s): Markets and Efficiency -(Exhibit: Markets and Efficiency) Referring to Panel (a):

Common property resources tend to be _______ through markets.

Which of the following is not a public good?

Use the following for questions 111-115. -(Exhibit: The Demand for Golf Balls) Assume that 1 dozen golf balls are purchased for $18 per dozen.Consumer surplus is:

An _______ results from any action that imposes costs on others outside of any market exchange.

Use the following to answer question(s): Markets and Efficiency -(Exhibit: Markets and Efficiency) Using Panel (a), which of the following statements is (are) true?

To say that individuals maximize is illustrated by saying:

Economists assume that consumers attempt to maximize utility.

An example of a public good is:

Use the following to answer question(s): Marginal Benefits and Marginal Costs -(Exhibit: Marginal Benefits and Marginal Costs) The marginal benefit of studying economics when the student is at 4 hours is _ points and the marginal cost is __ points.

The market will respond _______ to the preferences of a wealthy person as/than a poor one.

Private firms would be unlikely to attempt to produce the service of fending off incoming asteroids because:

Market efficiency requires exclusive, but not transferable, property rights.

According to the marginal decision rule, if marginal benefit:

Discuss and explain the role of property rights in an exchange economy.Explain the two characteristics property rights must have if efficient exchange is to take place.

The definition of a public good or private good depends on the ___ of the good and not on whether it is provided by the _ or _____ sector.

A copper mining operation discharges waste products into a river and causes higher costs and discomfort to downstream users of the water.In this case:

If the marginal benefit received from a good is equal to the marginal cost of production, then:

Use the following to answer question(s): Model of a Competitive Market -(Exhibit: Model of a Competitive Market) If there are no external benefits or costs, the output at Q will be:

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

In economics the assumption is made that consumers and firms will make choices that maximize(s) the _______ of each activity.

Use the following to answer question(s): Markets and Efficiency -(Exhibit: Markets and Efficiency) Referring to Panel (a):

Common property resources tend to be _______ through markets.

Which of the following is not a public good?

Use the following for questions 111-115. -(Exhibit: The Demand for Golf Balls) Assume that 1 dozen golf balls are purchased for $18 per dozen.Consumer surplus is:

An _______ results from any action that imposes costs on others outside of any market exchange.

Use the following to answer question(s): Markets and Efficiency -(Exhibit: Markets and Efficiency) Using Panel (a), which of the following statements is (are) true?

To say that individuals maximize is illustrated by saying:

Economists assume that consumers attempt to maximize utility.

An example of a public good is:

Use the following to answer question(s): Marginal Benefits and Marginal Costs -(Exhibit: Marginal Benefits and Marginal Costs) The marginal benefit of studying economics when the student is at 4 hours is _______ points and the marginal cost is ________ points.

The market will respond _______ to the preferences of a wealthy person as/than a poor one.

Private firms would be unlikely to attempt to produce the service of fending off incoming asteroids because:

Market efficiency requires exclusive, but not transferable, property rights.

According to the marginal decision rule, if marginal benefit:

Discuss and explain the role of property rights in an exchange economy.Explain the two characteristics property rights must have if efficient exchange is to take place.

The definition of a public good or private good depends on the _______ of the good and not on whether it is provided by the _______ or _______ sector.

A copper mining operation discharges waste products into a river and causes higher costs and discomfort to downstream users of the water.In this case:

If the marginal benefit received from a good is equal to the marginal cost of production, then:

Use the following to answer question(s): Model of a Competitive Market -(Exhibit: Model of a Competitive Market) If there are no external benefits or costs, the output at Q will be:

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): Marginal Benefits and Marginal Costs -(Exhibit: Marginal Benefits and Marginal Costs) The marginal benefit of studying economics when the student is at 4 hours is _ points and the marginal cost is __ points.

The definition of a public good or private good depends on the ___ of the good and not on whether it is provided by the _ or _____ sector.