Question 1

What is a private good?

Accepted Answer

A) A good whose benefits can be denied to non-buyers and whose consumption by one person reduces the amount available to others. 
B) A good provided by the government which could be provided by private firms. 
C) A good which could not be produced at a profit by the government. 
D) A good which could be provided by the government but only at a loss. 
A) A good whose benefits can be denied to non-buyers and whose consumption by one person reduces the amount available to others. 
B) A good provided by the government which could be provided by private firms. 
C) A good which could not be produced at a profit by the government. 
D) A good which could be provided by the government but only at a loss.

Question 2

-Refer to the diagram above.When quantity supplied and quantity demanded are equal,producer surplus is equal to

Accepted Answer

A) $600. 
B) $1,200. 
C) $1,400. 
D) $2,000. 
E) $2,400. 
A) $600. 
B) $1,200. 
C) $1,400. 
D) $2,000. 
E) $2,400.

Question 3

What is an externality? Why do they exist?

Accepted Answer

An externality is a benefit or cost of a

Question 4

A subsidy granted to a polluting firm would be one way of integrating external costs.

Accepted Answer

A) True 
 B)False

Question 5

All the following,except one,are benefits of the perfectly-competitive market system.Which is the exception?

Accepted Answer

A) It is productively efficient. 
B) It ensures that income is fairly distributed. 
C) It is allocatively efficient. 
D) It is a costless system. 
A) It is productively efficient. 
B) It ensures that income is fairly distributed. 
C) It is allocatively efficient. 
D) It is a costless system.

Question 6

-Refer to the diagram above.If the price is currently $16.30 per unit,consumer surplus equals

Accepted Answer

A) $1,400. 
B) $600. 
C) $423.50. 
D) $1,171.50. 
E) $1,350. 
A) $1,400. 
B) $600. 
C) $423.50. 
D) $1,171.50. 
E) $1,350.

Question 7

Which form of pollution control would one expect environmental groups to favour the most?

Accepted Answer

A) Legislative controls,because of the built-in incentive firms have to reduce pollution below the required minimum. 
B) A pollution tax,because the producer pays all of the tax and the consumer none. 
C) The pollution tax,because the consumer pays all of the tax and the producer none. 
D) The marketing of pollution permits because the environmental group has the option of directly reducing pollution by buying permits and not using them. 
A) Legislative controls,because of the built-in incentive firms have to reduce pollution below the required minimum. 
B) A pollution tax,because the producer pays all of the tax and the consumer none. 
C) The pollution tax,because the consumer pays all of the tax and the producer none. 
D) The marketing of pollution permits because the environmental group has the option of directly reducing pollution by buying permits and not using them.

Question 8

State three reasons why the government provide quasi-public goods.

Accepted Answer

There are three main reasons why governm

Question 9

The following table shows the marginal private benefits and marginal private cost of providing daycare spaces in the province:
  
-Refer to the above information to answer this question.Given the marginal private benefits and marginal private costs of providing daycare spaces,what is the equilibrium quantity of daycare spaces provided in the market?

Accepted Answer

A) 3,000. 
B) 5,000. 
C) 7,000. 
D) 8,000. 
E) 9,000. 
A) 3,000. 
B) 5,000. 
C) 7,000. 
D) 8,000. 
E) 9,000.

Question 10

The following are cost data for four different size plants available to a competitive producer:
  
-Refer to the above information to answer this question.If the market price of this product is $60,which is the best size of plant?

Accepted Answer

A) The plant represented by AC1. 
B) The plant represented by AC2. 
C) The plant represented by AC3. 
D) The plant represented by AC4. 
E) It depends on whether it is the short run or the long run. 
A) The plant represented by AC1. 
B) The plant represented by AC2. 
C) The plant represented by AC3. 
D) The plant represented by AC4. 
E) It depends on whether it is the short run or the long run.

Question 11

What is a quasi-public good?

Accepted Answer

A) A private good provided by the government. 
B) A public good sold privately to individuals. 
C) A private good provided by the market 
D) A public good provided by the government. 
A) A private good provided by the government. 
B) A public good sold privately to individuals. 
C) A private good provided by the market 
D) A public good provided by the government.

Question 12

The sum of the economic surpluses accruing to buyers and sellers is

Accepted Answer

A) producer surplus. 
B) deadweight loss. 
C) total economic surplus. 
D) conspicuous consumption. 
E) consumer surplus. 
A) producer surplus. 
B) deadweight loss. 
C) total economic surplus. 
D) conspicuous consumption. 
E) consumer surplus.

Question 13

The following table shows the marginal private benefits and marginal private cost of providing daycare spaces in the province:
  
-Refer to the above information to answer this question.In an effort to increase the number of daycare spaces,suppose the authorities give daycare operators a subsidy of $150 for each child registered.What will be the new equilibrium quantity?

Accepted Answer

A) 3,000. 
B) 5,000. 
C) 7,000. 
D) 8,000. 
E) 9,000. 
A) 3,000. 
B) 5,000. 
C) 7,000. 
D) 8,000. 
E) 9,000.

Question 14

-What are the two main methods used to integrate external benefits into the provision of goods and services?

Accepted Answer

A) By providing quasi-public goods or taxing producers. 
B) By taxing producers and consumers. 
C) By providing quasi-public goods or subsidizing producers. 
D) By providing normal goods or taxing producers. 
A) By providing quasi-public goods or taxing producers. 
B) By taxing producers and consumers. 
C) By providing quasi-public goods or subsidizing producers. 
D) By providing normal goods or taxing producers.

Question 15

The following table shows the marginal private benefits and marginal private cost of providing daycare spaces in the province:
  
-Refer to the above information to answer this question.In an effort to increase the number of daycare spaces,suppose the authorities give parents a subsidy of $150 for each child registered.What will be the new equilibrium quantity?

Accepted Answer

A) 9,000. 
B) 8,000. 
C) 7,000. 
D) 5,000. 
E) 3,000. 
A) 9,000. 
B) 8,000. 
C) 7,000. 
D) 5,000. 
E) 3,000.

Question 16

Consumer surplus is the value of

Accepted Answer

A) consumer spending on frivolous goods. 
B) the cumulative difference between what consumers are willing to pay and the price they actually pay. 
C) the difference between the suggested retail price and the everyday low price. 
D) the difference between the list price and the price the consumer can negotiate. 
E) making bulk purchases. 
A) consumer spending on frivolous goods. 
B) the cumulative difference between what consumers are willing to pay and the price they actually pay. 
C) the difference between the suggested retail price and the everyday low price. 
D) the difference between the list price and the price the consumer can negotiate. 
E) making bulk purchases.

Question 17

Table 9.1,which shows the toll charges on a particular highway.
  
-Refer to Table 9.1 to answer this question.If using the road was presently free,what toll charge would be necessary to reduce traffic by 40 percent?

Accepted Answer

A) $1. 
B) $2. 
C) $3. 
D) $4. 
A) $1. 
B) $2. 
C) $3. 
D) $4.

Question 18

-Refer to the above graph to answer this question.If this product were taxed an amount equal to the external costs,what would be the equilibrium price and quantity?

Accepted Answer

A) $30 and 500. 
B) $40 and 800. 
C) $50 and 700. 
D) $50 and 900. 
E) $60 and 800. 
A) $30 and 500. 
B) $40 and 800. 
C) $50 and 700. 
D) $50 and 900. 
E) $60 and 800.

Question 19

What does the term "forces of uncompetition" refer to?

Accepted Answer

A) The tendency in the market for some firms to grow larger and drive other firms out of business,thereby eroding perfect competition. 
B) The inability of firms to provide all the products that people want. 
C) The inevitable wealth and income inequalities resulting from the market. 
D) The tendency of governments to take over certain firms. 
A) The tendency in the market for some firms to grow larger and drive other firms out of business,thereby eroding perfect competition. 
B) The inability of firms to provide all the products that people want. 
C) The inevitable wealth and income inequalities resulting from the market. 
D) The tendency of governments to take over certain firms.

Question 20

In what ways are competitive markets part of the problem of income and wealth inequalities,and in what ways are they part of the solution?

Accepted Answer

There is obviously no definitive answer

What is a private good?

-Refer to the diagram above.When quantity supplied and quantity demanded are equal,producer surplus is equal to

What is an externality? Why do they exist?

A subsidy granted to a polluting firm would be one way of integrating external costs.

All the following,except one,are benefits of the perfectly-competitive market system.Which is the exception?

-Refer to the diagram above.If the price is currently $16.30 per unit,consumer surplus equals

Which form of pollution control would one expect environmental groups to favour the most?

State three reasons why the government provide quasi-public goods.

The following are cost data for four different size plants available to a competitive producer: -Refer to the above information to answer this question.If the market price of this product is $60,which is the best size of plant?

What is a quasi-public good?

The sum of the economic surpluses accruing to buyers and sellers is

-What are the two main methods used to integrate external benefits into the provision of goods and services?

Consumer surplus is the value of

Table 9.1,which shows the toll charges on a particular highway. -Refer to Table 9.1 to answer this question.If using the road was presently free,what toll charge would be necessary to reduce traffic by 40 percent?

-Refer to the above graph to answer this question.If this product were taxed an amount equal to the external costs,what would be the equilibrium price and quantity?

What does the term "forces of uncompetition" refer to?

In what ways are competitive markets part of the problem of income and wealth inequalities,and in what ways are they part of the solution?

The Economic Problem

Demand and Supply: An Introduction

Demand and Supply: An Elaboration

Elasticity

Consumer Choice

A Firms Production Decisions and Costs in the Short Run

Costs in the Long Run

Perfect Competition

Monopoly

Imperfect Competition

The Factors of Production

International Trade

Filters

Exam 9: An Evaluation of Competitive Markets

What is a private good?

-Refer to the diagram above.When quantity supplied and quantity demanded are equal,producer surplus is equal to

What is an externality? Why do they exist?

A subsidy granted to a polluting firm would be one way of integrating external costs.

All the following,except one,are benefits of the perfectly-competitive market system.Which is the exception?

-Refer to the diagram above.If the price is currently $16.30 per unit,consumer surplus equals

Which form of pollution control would one expect environmental groups to favour the most?

State three reasons why the government provide quasi-public goods.

The following are cost data for four different size plants available to a competitive producer: -Refer to the above information to answer this question.If the market price of this product is $60,which is the best size of plant?

What is a quasi-public good?

The sum of the economic surpluses accruing to buyers and sellers is

-What are the two main methods used to integrate external benefits into the provision of goods and services?

Consumer surplus is the value of

Table 9.1,which shows the toll charges on a particular highway. -Refer to Table 9.1 to answer this question.If using the road was presently free,what toll charge would be necessary to reduce traffic by 40 percent?

-Refer to the above graph to answer this question.If this product were taxed an amount equal to the external costs,what would be the equilibrium price and quantity?

What does the term "forces of uncompetition" refer to?

In what ways are competitive markets part of the problem of income and wealth inequalities,and in what ways are they part of the solution?

The Economic Problem

Demand and Supply: An Introduction

Demand and Supply: An Elaboration

Elasticity

Consumer Choice

A Firms Production Decisions and Costs in the Short Run

Costs in the Long Run

Perfect Competition

Monopoly

Imperfect Competition

The Factors of Production

International Trade

Filters