Exam 6: Efficiency and Fairness of Markets

Often politicians assert that a price,such as the price of gasoline or the rent for an apartment,is too high and that it is unfair for these prices to be so high.If these products are traded in competitive markets,what fairness rule are politicians using? Why?

What is the "big tradeoff"?

The price of a cowboy hat is $100.Willie is willing to pay $130,Waylon is willing to pay $100,and Merle is willing to pay $85.All of the following statements are true EXCEPT:

Which of the following leads to a deadweight loss? I.overproduction Ii.underproduction Iii.taxes Iv.monopoly

-The figure above shows a nation's production possibilities frontier.If the marginal cost equals the marginal benefit at point A when 4 million pizzas are produced,

To achieve allocative efficiency,an economy

A marginal benefit curve

The "big tradeoff" refers to

"Allocative efficiency requires that the maximum number of people have access to all of the goods and services that our economy produces." Is this statement true or false? Explain your answer.

Suppose a market produces 5,000 tons of wheat.At this quantity,the marginal cost exceeds the marginal benefit.This outcome could be the result of

The concept of "the invisible hand" suggests that to attain efficiency,the government should

The fair rules approach to fairness requires

In December 2010,Kansas had a severe ice storm that caused electrical blackouts.The Fictitious Portable Generator firm of Lawrence had several portable generators that could be used by homeowners to provide electricity.Which of the following would be the fair-rules way to provide them?

Mandy saved her allowance to buy a 12 pack of cream soda.When Mandy's brother saw the soda,he took four.Sodas were allocated between Mandy and her brother through

-The figure above shows the market for brooms.If 400 brooms are produced,

The figure above shows the market for pizza. -In the figure above,if pizza production is restricted to 5,000 pizzas a day,then marginal benefit ________ marginal cost,and ________ occurs.

-The figure above represents the competitive market for slices of key lime pie.When the price is $3,the total producer surplus equals

Which of the following describes the economic meanings of cost and price?

If the demand curve is the same as the marginal benefit curve and the supply curve is the same as the marginal cost curve,then the quantity at which they cross is I.the equilibrium quantity. Ii.the allocatively efficient quantity. Iii.the quantity with no deadweight loss.

Which of the following government policies ensures market efficiency?