Question 1

The point that each glass of lemonade consumed on a hot day brings lower and lower levels of satisfaction is known as the principle of

Accepted Answer

A) total benefits. 
B) increasing marginal cost. 
C) decreasing marginal benefit. 
D) increasing opportunity cost. 
E) decreasing marginal price. 
A) total benefits. 
B) increasing marginal cost. 
C) decreasing marginal benefit. 
D) increasing opportunity cost. 
E) decreasing marginal price.

Question 2

Value is

Accepted Answer

A) the price we pay for a good. 
B) the cost of resources used to produce a good. 
C) objective so that it is determined by market forces,not preferences. 
D) the marginal benefit we get from consuming another unit of a good or service. 
E) the difference between the price paid for a good and the marginal cost of producing that unit of the good. 
A) the price we pay for a good. 
B) the cost of resources used to produce a good. 
C) objective so that it is determined by market forces,not preferences. 
D) the marginal benefit we get from consuming another unit of a good or service. 
E) the difference between the price paid for a good and the marginal cost of producing that unit of the good.

Question 3

-Using the values for the marginal benefit and the marginal cost of a bushel of apples given in the table above,what is the allocatively efficient quantity of apples? Suppose 10 million bushels of apples are produced.Should the quantity be increased or decreased? What if 20 million bushels are produced;should the quantity be increased or decreased?

Accepted Answer

The allocatively efficient quantity of a

Question 4

-In the figure above,if the market is at equilibrium,the sum of the total consumer surplus and the total producer surplus is

Accepted Answer

A) $240. 
B) $600. 
C) $1,000. 
D) $0. 
E) $60. 
A) $240. 
B) $600. 
C) $1,000. 
D) $0. 
E) $60.

Question 5

The supply curve is the same as another curve.What other curve is the same as the supply curve? Why are the curves the same?

Accepted Answer

The supply curve is the same as the marg

Question 6

The concept of "the invisible hand" suggests that markets

Accepted Answer

A) do not produce the efficient quantity. 
B) are always fair. 
C) produce the efficient quantity. 
D) are unfair. 
E) allocate resources unfairly and inefficiently. 
A) do not produce the efficient quantity. 
B) are always fair. 
C) produce the efficient quantity. 
D) are unfair. 
E) allocate resources unfairly and inefficiently.

Question 7

Draw and describe a marginal cost curve for slices of pizza where the opportunity cost of producing a slice of pizza is a taco.

Accepted Answer

@#IMG-DLM& A marginal cost curve is drawn as an up

Question 8

To a seller,the cost of a good or service is ________,and the price is ________.

Accepted Answer

A) what must be given up to produce the good or service;what is received for the good or service 
B) what is received for the good or service;what must be given up to produce the good or service 
C) the producer surplus the seller receives;the consumer surplus the buyer receives 
D) the producer surplus the buyer receives;the consumer surplus the seller receives 
E) None of the above answers is correct. 
A) what must be given up to produce the good or service;what is received for the good or service 
B) what is received for the good or service;what must be given up to produce the good or service 
C) the producer surplus the seller receives;the consumer surplus the buyer receives 
D) the producer surplus the buyer receives;the consumer surplus the seller receives 
E) None of the above answers is correct.

Question 9

Explain how the invisible hand delivers an efficient market outcome.

Accepted Answer

The invisible hand concepts claims that

Question 10

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The producer surplus from all the sodas sold is

Accepted Answer

A) $0.00. 
B) $15.00. 
C) $20.00. 
D) $1.00. 
E) None of the above answers is correct. 
A) $0.00. 
B) $15.00. 
C) $20.00. 
D) $1.00. 
E) None of the above answers is correct.

Question 11

The phrase "decreasing marginal benefit" means that

Accepted Answer

A) the more you consume of the product,the less total benefit you derive. 
B) the marginal cost will be increasing as you consume more of a good. 
C) each additional unit of a good you consume gives you less additional benefit than the previous unit. 
D) Both answers A and B are correct. 
E) Both answers A and C are correct. 
A) the more you consume of the product,the less total benefit you derive. 
B) the marginal cost will be increasing as you consume more of a good. 
C) each additional unit of a good you consume gives you less additional benefit than the previous unit. 
D) Both answers A and B are correct. 
E) Both answers A and C are correct.

Question 12

When people cannot be excluded from consuming a good,even if they have not paid for the good,competitive markets would

Accepted Answer

A) produce more of the good than society needs. 
B) allocate more resources than the efficient amount to the production of the good. 
C) produce the good so that people could enjoy a "free ride." 
D) produce less than the efficient quantity. 
E) eliminate the deadweight loss. 
A) produce more of the good than society needs. 
B) allocate more resources than the efficient amount to the production of the good. 
C) produce the good so that people could enjoy a "free ride." 
D) produce less than the efficient quantity. 
E) eliminate the deadweight loss.

Question 13

Deadweight loss and market failure are created when a market produces

Accepted Answer

A) either more or less than the efficient quantity. 
B) more than the efficient quantity but not when less than the efficient quantity is produced. 
C) less than the efficient quantity but not when more than the efficient quantity is produced. 
D) the efficient quantity. 
E) None of the above answers is correct because deadweight loss has nothing to do with the efficient quantity. 
A) either more or less than the efficient quantity. 
B) more than the efficient quantity but not when less than the efficient quantity is produced. 
C) less than the efficient quantity but not when more than the efficient quantity is produced. 
D) the efficient quantity. 
E) None of the above answers is correct because deadweight loss has nothing to do with the efficient quantity.

Question 14

The supply curve is upward sloping because of

Accepted Answer

A) increasing marginal cost. 
B) decreasing marginal benefit. 
C) decreasing marginal cost. 
D) increasing marginal benefit. 
E) increasing total cost. 
A) increasing marginal cost. 
B) decreasing marginal benefit. 
C) decreasing marginal cost. 
D) increasing marginal benefit. 
E) increasing total cost.

Question 15

-The figure above shows the market for pants.If the government subsidizes the production of pants so that production expands from 6 million pairs to 7 million pairs,

Accepted Answer

A) there would be no deadweight loss. 
B) the government's policy would have no effect on the sum of consumer surplus and producer surplus. 
C) a deadweight loss would result. 
D) the government's policy would increase the sum of consumer surplus and producer surplus. 
E) production would be even more efficient than if 6 million pairs of pants are produced because more is always better than less. 
A) there would be no deadweight loss. 
B) the government's policy would have no effect on the sum of consumer surplus and producer surplus. 
C) a deadweight loss would result. 
D) the government's policy would increase the sum of consumer surplus and producer surplus. 
E) production would be even more efficient than if 6 million pairs of pants are produced because more is always better than less.

Question 16

Which of the following leads to a deadweight loss?
I.competition
Ii.taxes
Iii.consumer surplus
Iv.monopoly

Accepted Answer

A) ii only 
B) iii and iv 
C) i and ii 
D) ii and iv 
E) i,ii,and iii 
A) ii only 
B) iii and iv 
C) i and ii 
D) ii and iv 
E) i,ii,and iii

Question 17

What did Adam Smith identify as the source of the invisible hand in 1776?

Accepted Answer

A) a benevolent central government that decided was best for everyone 
B) an individual's concern for fellow humans 
C) an individual's own self-interest 
D) the stock market 
E) buyers' and suppliers' concerns to obtain and retain good reputations 
A) a benevolent central government that decided was best for everyone 
B) an individual's concern for fellow humans 
C) an individual's own self-interest 
D) the stock market 
E) buyers' and suppliers' concerns to obtain and retain good reputations

Question 18

The figure above shows the demand curve for pizza and the market price of pizza.
-In the figure above,what is the consumer surplus per day?

Accepted Answer

A) $100,000 
B) $50,000 
C) $125,000 
D) $150,000 
E) zero 
A) $100,000 
B) $50,000 
C) $125,000 
D) $150,000 
E) zero

Question 19

If the difference between the marginal benefit and the marginal cost of a good is as large as possible,

Accepted Answer

A) resources are being used with maximum efficiency. 
B) resources would create more value producing other goods and hence the production of this good should be decreased. 
C) more of the good should be produced. 
D) allocative efficiency has been attained. 
E) Both answers A and D are correct. 
A) resources are being used with maximum efficiency. 
B) resources would create more value producing other goods and hence the production of this good should be decreased. 
C) more of the good should be produced. 
D) allocative efficiency has been attained. 
E) Both answers A and D are correct.

Question 20

Wal-Mart has a limited number of "Black Friday" (the day after Thanksgiving Day)special items on sale at prices well below their typical price.Wal-Mart opens at 10 PM on Thanksgiving.Wal-Mart is using a ________ allocation method for these items.

Accepted Answer

A) first-come,first-served 
B) market price 
C) contest 
D) majority rule 
E) command 
A) first-come,first-served 
B) market price 
C) contest 
D) majority rule 
E) command

The point that each glass of lemonade consumed on a hot day brings lower and lower levels of satisfaction is known as the principle of

Value is

-In the figure above,if the market is at equilibrium,the sum of the total consumer surplus and the total producer surplus is

The supply curve is the same as another curve.What other curve is the same as the supply curve? Why are the curves the same?

The concept of "the invisible hand" suggests that markets

Draw and describe a marginal cost curve for slices of pizza where the opportunity cost of producing a slice of pizza is a taco.

To a seller,the cost of a good or service is ,and the price is .

Explain how the invisible hand delivers an efficient market outcome.

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The producer surplus from all the sodas sold is

The phrase "decreasing marginal benefit" means that

When people cannot be excluded from consuming a good,even if they have not paid for the good,competitive markets would

Deadweight loss and market failure are created when a market produces

The supply curve is upward sloping because of

-The figure above shows the market for pants.If the government subsidizes the production of pants so that production expands from 6 million pairs to 7 million pairs,

Which of the following leads to a deadweight loss? I.competition Ii.taxes Iii.consumer surplus Iv.monopoly

What did Adam Smith identify as the source of the invisible hand in 1776?

The figure above shows the demand curve for pizza and the market price of pizza. -In the figure above,what is the consumer surplus per day?

If the difference between the marginal benefit and the marginal cost of a good is as large as possible,

Wal-Mart has a limited number of "Black Friday" (the day after Thanksgiving Day)special items on sale at prices well below their typical price.Wal-Mart opens at 10 PM on Thanksgiving.Wal-Mart is using a ________ allocation method for these items.

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 6: Efficiency and Fairness of Markets

The point that each glass of lemonade consumed on a hot day brings lower and lower levels of satisfaction is known as the principle of

Value is

-In the figure above,if the market is at equilibrium,the sum of the total consumer surplus and the total producer surplus is

The supply curve is the same as another curve.What other curve is the same as the supply curve? Why are the curves the same?

The concept of "the invisible hand" suggests that markets

Draw and describe a marginal cost curve for slices of pizza where the opportunity cost of producing a slice of pizza is a taco.

To a seller,the cost of a good or service is ________,and the price is ________.

Explain how the invisible hand delivers an efficient market outcome.

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The producer surplus from all the sodas sold is

The phrase "decreasing marginal benefit" means that

When people cannot be excluded from consuming a good,even if they have not paid for the good,competitive markets would

Deadweight loss and market failure are created when a market produces

The supply curve is upward sloping because of

-The figure above shows the market for pants.If the government subsidizes the production of pants so that production expands from 6 million pairs to 7 million pairs,

Which of the following leads to a deadweight loss? I.competition Ii.taxes Iii.consumer surplus Iv.monopoly

What did Adam Smith identify as the source of the invisible hand in 1776?

The figure above shows the demand curve for pizza and the market price of pizza. -In the figure above,what is the consumer surplus per day?

If the difference between the marginal benefit and the marginal cost of a good is as large as possible,

Wal-Mart has a limited number of "Black Friday" (the day after Thanksgiving Day)special items on sale at prices well below their typical price.Wal-Mart opens at 10 PM on Thanksgiving.Wal-Mart is using a ________ allocation method for these items.

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

To a seller,the cost of a good or service is ,and the price is .