Question 1

Figure 5-2  
-Refer to Figure 5-2.What area represents producer surplus at a price of P2?

Accepted Answer

A)  A + B 
B)  B + D 
C)  A + B + C 
D)  A + B + C + D + E 
A)  A + B 
B)  B + D 
C)  A + B + C 
D)  A + B + C + D + E

Question 2

Figure 5-5   Figure 5-5 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1000 per month.
-Refer to Figure 5-5.With rent control,the quantity supplied is 200 apartments.Suppose apartment owners ignore the law and rent this quantity for the highest rent they can get.What is the highest rent they can get per month?

Accepted Answer

A)  $1000 
B)  $1500 
C)  $2000 
D)  $2300 
A)  $1000 
B)  $1500 
C)  $2000 
D)  $2300

Question 3

Consumer surplus in a market for a product would be equal to ________ if the market price was zero.

Accepted Answer

A)  zero 
B)  the area between the supply curve and the demand curve 
C)  the area above the supply curve 
D)  the area under the demand curve 
A)  zero 
B)  the area between the supply curve and the demand curve 
C)  the area above the supply curve 
D)  the area under the demand curve

Question 4

The total amount of producer surplus in a market is equal to the area below the supply curve.

Accepted Answer

A) True 
 B)False

Question 5

Companies in the sharing economy have the potential to lower the equilibrium price in their market,and by doing so increase efficiency.This would have a tendency to

Accepted Answer

A)  increase producer surplus and increase deadweight loss. 
B)  increase consumer surplus and decrease deadweight loss. 
C)  decrease consumer surplus and decrease producer surplus. 
D)  maximise consumer surplus and minimise producer surplus. 
A)  increase producer surplus and increase deadweight loss. 
B)  increase consumer surplus and decrease deadweight loss. 
C)  decrease consumer surplus and decrease producer surplus. 
D)  maximise consumer surplus and minimise producer surplus.

Question 6

If,in a competitive market,marginal benefit is less than marginal cost,

Accepted Answer

A)  the net benefit to consumers from participating in the market is less than the net benefit to producers. 
B)  the government must force producers to raise prices in order to achieve economic efficiency. 
C)  the quantity sold is greater than the equilibrium quantity. 
D)  the quantity sold is less than the equilibrium quantity. 
A)  the net benefit to consumers from participating in the market is less than the net benefit to producers. 
B)  the government must force producers to raise prices in order to achieve economic efficiency. 
C)  the quantity sold is greater than the equilibrium quantity. 
D)  the quantity sold is less than the equilibrium quantity.

Question 7

Table 5-2
  
-Refer to Table 5-2.The table above lists the highest prices five consumers are willing to pay for a theatre ticket.If the price of one ticket is $25,

Accepted Answer

A)  everyone will buy a ticket. 
B)  consumer surplus will be maximised. 
C)  Anya's consumer surplus is $1. 
D)  no one will buy a ticket. 
A)  everyone will buy a ticket. 
B)  consumer surplus will be maximised. 
C)  Anya's consumer surplus is $1. 
D)  no one will buy a ticket.

Question 8

The incidence of a tax depends on whether the government collects the tax from buyers or sellers.

Accepted Answer

A) True 
 B)False

Question 9

Figure 5-7   Figure 5-7 shows the market for beer. The government plans to impose a unit tax in this market.
-Refer to Figure 5-7.How much of the tax is paid by buyers?

Accepted Answer

A)  $2 
B)  $5 
C)  $7 
D)  $12 
A)  $2 
B)  $5 
C)  $7 
D)  $12

Question 10

Figure 5-5   Figure 5-5 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1000 per month.
-Refer to Figure 5-5.Suppose that instead of a rent ceiling,the government imposed a price floor of $2000 per month for apartments.What is the value of the portion of consumer surplus transferred to producers as a result of the price floor?

Accepted Answer

A)  $40 000 
B)  $100 000 
C)  $125 000 
D)  $140 000 
A)  $40 000 
B)  $100 000 
C)  $125 000 
D)  $140 000

Question 11

Deadweight loss refers to the reduction in economic surplus resulting from a market not being in competitive equilibrium.

Accepted Answer

A) True 
 B)False

Question 12

The minimum wage is an example of a price ceiling.

Accepted Answer

A) True 
 B)False

Question 13

Shortage means the same thing as scarcity.

Accepted Answer

A) True 
 B)False

Question 14

Figure 5-3   Figure 5-3 shows the market for tiger shrimp. The market is initially in equilibrium at a price of $15 and a quantity of 80. Now suppose producers decide to cut output to 40 in order to raise the price to $18.
-Refer to Figure 5-3.At the equilibrium price of $15,consumers are willing to buy 80 kilograms of tiger shrimp.Is this an economically efficient quantity?

Accepted Answer

A)  No, the marginal benefit of the 80th unit exceeds the marginal cost of the 80th unit. 
B)  Yes, because marginal cost is zero at the 80th unit. 
C)  Yes, because $15 is the price where the marginal benefit is equal to the marginal cost. 
D)  No, the marginal cost of the 80th unit exceeds the marginal benefit of the 80th unit. 
A)  No, the marginal benefit of the 80th unit exceeds the marginal cost of the 80th unit. 
B)  Yes, because marginal cost is zero at the 80th unit. 
C)  Yes, because $15 is the price where the marginal benefit is equal to the marginal cost. 
D)  No, the marginal cost of the 80th unit exceeds the marginal benefit of the 80th unit.

Question 15

Marginal benefit is equal to the ________ benefit a consumer receives from consuming one more unit of a good or service.

Accepted Answer

A)  total 
B)  unintended 
C)  additional 
D)  surplus 
A)  total 
B)  unintended 
C)  additional 
D)  surplus

Question 16

The sum of consumer surplus and producer surplus is called economic surplus.

Accepted Answer

A) True 
 B)False

Question 17

Figure 5-3   Figure 5-3 shows the market for tiger shrimp. The market is initially in equilibrium at a price of $15 and a quantity of 80. Now suppose producers decide to cut output to 40 in order to raise the price to $18.
-Refer to Figure 5-3.What is the value of producer surplus at the equilibrium price of $15?

Accepted Answer

A)  $80 
B)  $160 
C)  $240 
D)  $400 
A)  $80 
B)  $160 
C)  $240 
D)  $400

Question 18

The payroll tax is a tax imposed on ________ .

Accepted Answer

A)  employers only 
B)  workers only 
C)  employers and workers 
D)  the unemployed 
A)  employers only 
B)  workers only 
C)  employers and workers 
D)  the unemployed

Question 19

If there is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and consumer surplus plus producer surplus is maximised,then

Accepted Answer

A)  maximum deadweight loss occurs. 
B)  economic efficiency is achieved. 
C)  profits are maximised. 
D)  costs are minimised. 
A)  maximum deadweight loss occurs. 
B)  economic efficiency is achieved. 
C)  profits are maximised. 
D)  costs are minimised.

Question 20

In a competitive market equilibrium

Accepted Answer

A)  total consumer surplus equals total producer surplus. 
B)  marginal benefit and marginal cost are maximised. 
C)  consumers and producers benefit equally. 
D)  the marginal benefit equals the marginal cost of the last unit sold. 
A)  total consumer surplus equals total producer surplus. 
B)  marginal benefit and marginal cost are maximised. 
C)  consumers and producers benefit equally. 
D)  the marginal benefit equals the marginal cost of the last unit sold.

Figure 5-2 -Refer to Figure 5-2.What area represents producer surplus at a price of P₂?

Consumer surplus in a market for a product would be equal to ________ if the market price was zero.

The total amount of producer surplus in a market is equal to the area below the supply curve.

Companies in the sharing economy have the potential to lower the equilibrium price in their market,and by doing so increase efficiency.This would have a tendency to

If,in a competitive market,marginal benefit is less than marginal cost,

Table 5-2 -Refer to Table 5-2.The table above lists the highest prices five consumers are willing to pay for a theatre ticket.If the price of one ticket is $25,

The incidence of a tax depends on whether the government collects the tax from buyers or sellers.

Figure 5-7 Figure 5-7 shows the market for beer. The government plans to impose a unit tax in this market. -Refer to Figure 5-7.How much of the tax is paid by buyers?

Deadweight loss refers to the reduction in economic surplus resulting from a market not being in competitive equilibrium.

The minimum wage is an example of a price ceiling.

Shortage means the same thing as scarcity.

Marginal benefit is equal to the ________ benefit a consumer receives from consuming one more unit of a good or service.

The sum of consumer surplus and producer surplus is called economic surplus.

The payroll tax is a tax imposed on ________ .

If there is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and consumer surplus plus producer surplus is maximised,then

In a competitive market equilibrium

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 5: The Economics of Healthcare

Figure 5-2 -Refer to Figure 5-2.What area represents producer surplus at a price of P2?

Consumer surplus in a market for a product would be equal to ________ if the market price was zero.

The total amount of producer surplus in a market is equal to the area below the supply curve.

Companies in the sharing economy have the potential to lower the equilibrium price in their market,and by doing so increase efficiency.This would have a tendency to

If,in a competitive market,marginal benefit is less than marginal cost,

Table 5-2 -Refer to Table 5-2.The table above lists the highest prices five consumers are willing to pay for a theatre ticket.If the price of one ticket is $25,

The incidence of a tax depends on whether the government collects the tax from buyers or sellers.

Figure 5-7 Figure 5-7 shows the market for beer. The government plans to impose a unit tax in this market. -Refer to Figure 5-7.How much of the tax is paid by buyers?

Deadweight loss refers to the reduction in economic surplus resulting from a market not being in competitive equilibrium.

The minimum wage is an example of a price ceiling.

Shortage means the same thing as scarcity.

Marginal benefit is equal to the ________ benefit a consumer receives from consuming one more unit of a good or service.

The sum of consumer surplus and producer surplus is called economic surplus.

The payroll tax is a tax imposed on ________ .

If there is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and consumer surplus plus producer surplus is maximised,then

In a competitive market equilibrium

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Figure 5-2 -Refer to Figure 5-2.What area represents producer surplus at a price of P₂?