Question 1

When efficiency is attained,the sum of the total amount of consumer surplus and producer surplus is

Accepted Answer

A) minimized. 
B) maximized. 
C) equal to the deadweight loss. 
D) undefined. 
E) equal to zero. 
A) minimized. 
B) maximized. 
C) equal to the deadweight loss. 
D) undefined. 
E) equal to zero.

Question 2

The producer surplus on a unit of a good is

Accepted Answer

A) equal to the marginal benefit from the good minus its price. 
B) equal to the price of the good minus the marginal cost of producing it. 
C) always equal to consumer surplus. 
D) Both answers A and C are correct. 
E) Both answers B and C are correct. 
A) equal to the marginal benefit from the good minus its price. 
B) equal to the price of the good minus the marginal cost of producing it. 
C) always equal to consumer surplus. 
D) Both answers A and C are correct. 
E) Both answers B and C are correct.

Question 3

Jason needs help getting ready for the next test in his economics course and would like to hire Maria,an economics tutor,to help him.Jason is willing to pay $30 for the first hour of tutoring,$25 for the second,$20 for the third,$15 for the fourth,and $10 for the fifth.The equilibrium price for tutoring is $15 per hour.For how many hours of tutoring will Jason hire Maria? Why this amount of hours? What is Jason's consumer surplus,if any,from the tutoring? What is Maria's consumer surplus from the tutoring?

Accepted Answer

Jason will hire Maria for 4 hours of tut

Question 4

Which of the following is true? When there are no externalities,public goods,common resources,taxes or subsidies,then
I.allocative efficiency occurs when marginal benefit exceeds marginal cost by as much as possible.
Ii.an a competitive equilibrium,resource allocation is efficient.
Iii.fair rules require income transfers from the rich to the poor.

Accepted Answer

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

Question 5

Is the marginal benefit someone enjoys from a good or service the same as the price he or she pays? Explain your answer.

Accepted Answer

Generally the marginal benefit of a good

Question 6

As more of a good is consumed,the marginal benefit of the good

Accepted Answer

A) increases. 
B) decreases. 
C) remains constant. 
D) is unpredictable. 
E) first decreases and then increases. 
A) increases. 
B) decreases. 
C) remains constant. 
D) is unpredictable. 
E) first decreases and then increases.

Question 7

In general,the marginal cost curve

Accepted Answer

A) has a positive slope. 
B) has a negative slope. 
C) is horizontal. 
D) is vertical. 
E) is U-shaped. 
A) has a positive slope. 
B) has a negative slope. 
C) is horizontal. 
D) is vertical. 
E) is U-shaped.

Question 8

A supply curve shows the marginal

Accepted Answer

A) benefit consumers receive from consuming a good. 
B) profit businesses earn from selling a good. 
C) cost of producing the good. 
D) price paid for a good. 
E) benefit sellers receive from selling a good. 
A) benefit consumers receive from consuming a good. 
B) profit businesses earn from selling a good. 
C) cost of producing the good. 
D) price paid for a good. 
E) benefit sellers receive from selling a good.

Question 9

If marginal benefit is equal to marginal cost,then the

Accepted Answer

A) producer surplus is equal to the consumer surplus. 
B) sum of producer surplus and consumer surplus is as large as possible. 
C) sum of producer surplus and consumer surplus equals zero. 
D) market has squeezed out total surplus so that it equals zero. 
E) deadweight loss is more than zero but less than its maximum. 
A) producer surplus is equal to the consumer surplus. 
B) sum of producer surplus and consumer surplus is as large as possible. 
C) sum of producer surplus and consumer surplus equals zero. 
D) market has squeezed out total surplus so that it equals zero. 
E) deadweight loss is more than zero but less than its maximum.

Question 10

Overproduction results in

Accepted Answer

A) external costs. 
B) external benefits. 
C) deadweight loss. 
D) super-efficiency. 
E) the marginal benefit of the last unit produced being larger than the marginal cost. 
A) external costs. 
B) external benefits. 
C) deadweight loss. 
D) super-efficiency. 
E) the marginal benefit of the last unit produced being larger than the marginal cost.

Question 11

When a product benefits people other than the buyer of the product,the product is said to have

Accepted Answer

A) an external cost. 
B) an excludable cost. 
C) an external benefit. 
D) an excludable benefit. 
E) a subsidized benefit. 
A) an external cost. 
B) an excludable cost. 
C) an external benefit. 
D) an excludable benefit. 
E) a subsidized benefit.

Question 12

A monopoly is

Accepted Answer

A) the single buyer of some good or service. 
B) a firm that has control of a market because it is the only seller. 
C) a firm that creates enormous external costs. 
D) a firm that faces intense competition. 
E) a cost of producing a good or service. 
A) the single buyer of some good or service. 
B) a firm that has control of a market because it is the only seller. 
C) a firm that creates enormous external costs. 
D) a firm that faces intense competition. 
E) a cost of producing a good or service.

Question 13

Marginal benefit is the benefit that a person receives from consuming

Accepted Answer

A) a good or service until the person has grown tired of it. 
B) only goods and services that are free. 
C) one more unit of a good or service. 
D) all of the possible units of a good or service that can be consumed. 
E) one more unit of a good and is equal to the cost of producing the unit of the good. 
A) a good or service until the person has grown tired of it. 
B) only goods and services that are free. 
C) one more unit of a good or service. 
D) all of the possible units of a good or service that can be consumed. 
E) one more unit of a good and is equal to the cost of producing the unit of the good.

Question 14

What do economists call the loss society experiences when there is market failure and the production of a good is less than the efficient amount?

Accepted Answer

A) tax 
B) subsidy 
C) price floor 
D) deadweight loss 
E) quantity restriction 
A) tax 
B) subsidy 
C) price floor 
D) deadweight loss 
E) quantity restriction

Question 15

When economists use the term "big tradeoff" when discussing efficiency they are referring to the tradeoff between

Accepted Answer

A) external costs and external benefits. 
B) marginal cost and marginal benefits. 
C) producer surplus and consumer surplus. 
D) efficiency and fairness. 
E) deadweight loss and producer/consumer surplus. 
A) external costs and external benefits. 
B) marginal cost and marginal benefits. 
C) producer surplus and consumer surplus. 
D) efficiency and fairness. 
E) deadweight loss and producer/consumer surplus.

Question 16

What approach to fairness argues in favor of government policies that redistribute income so that there is more equality of income?

Accepted Answer

The general approach to fairness that ar

Question 17

What must be true for a consumer to buy a good or service?

Accepted Answer

A) The price must be equal to or less than the marginal benefit. 
B) The total benefit received must equal the total spent to buy the good or service. 
C) The consumer must be able to obtain some consumer surplus. 
D) The consumer must not be able to produce the product. 
E) The price must be equal to or greater than the marginal benefit. 
A) The price must be equal to or less than the marginal benefit. 
B) The total benefit received must equal the total spent to buy the good or service. 
C) The consumer must be able to obtain some consumer surplus. 
D) The consumer must not be able to produce the product. 
E) The price must be equal to or greater than the marginal benefit.

Question 18

When allocative efficiency occurs,

Accepted Answer

A) an economy produces the goods and services most highly valued. 
B) marginal benefit exceeds marginal cost by some amount. 
C) technology must be increasing. 
D) we can simultaneously produce more of all goods. 
E) marginal benefit exceeds marginal cost by as much as possible. 
A) an economy produces the goods and services most highly valued. 
B) marginal benefit exceeds marginal cost by some amount. 
C) technology must be increasing. 
D) we can simultaneously produce more of all goods. 
E) marginal benefit exceeds marginal cost by as much as possible.

Question 19

The price of a cowboy hat is $100.Willie can produce a hat at a marginal cost of $130,Waylon can produce at a marginal cost of $100,and Merle can produce at a marginal cost of $85.Which of the following statements is correct?

Accepted Answer

A) The sum of producer surplus is $15. 
B) All three of these sellers will gain producer surplus from selling a hat. 
C) The sum of producer surplus is $30. 
D) Willie's producer surplus is $30. 
E) The sum of producer surplus is $45. 
A) The sum of producer surplus is $15. 
B) All three of these sellers will gain producer surplus from selling a hat. 
C) The sum of producer surplus is $30. 
D) Willie's producer surplus is $30. 
E) The sum of producer surplus is $45.

Question 20

When less than the efficient amount of a good is produced,how does the marginal benefit of the last unit produced compare to its marginal cost?

Accepted Answer

When less than the efficient amount of a

When efficiency is attained,the sum of the total amount of consumer surplus and producer surplus is

The producer surplus on a unit of a good is

Is the marginal benefit someone enjoys from a good or service the same as the price he or she pays? Explain your answer.

As more of a good is consumed,the marginal benefit of the good

In general,the marginal cost curve

A supply curve shows the marginal

If marginal benefit is equal to marginal cost,then the

Overproduction results in

When a product benefits people other than the buyer of the product,the product is said to have

A monopoly is

Marginal benefit is the benefit that a person receives from consuming

What do economists call the loss society experiences when there is market failure and the production of a good is less than the efficient amount?

When economists use the term "big tradeoff" when discussing efficiency they are referring to the tradeoff between

What approach to fairness argues in favor of government policies that redistribute income so that there is more equality of income?

What must be true for a consumer to buy a good or service?

When allocative efficiency occurs,

The price of a cowboy hat is $100.Willie can produce a hat at a marginal cost of $130,Waylon can produce at a marginal cost of $100,and Merle can produce at a marginal cost of $85.Which of the following statements is correct?

When less than the efficient amount of a good is produced,how does the marginal benefit of the last unit produced compare to its marginal cost?

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

When efficiency is attained,the sum of the total amount of consumer surplus and producer surplus is

The producer surplus on a unit of a good is

Is the marginal benefit someone enjoys from a good or service the same as the price he or she pays? Explain your answer.

As more of a good is consumed,the marginal benefit of the good

In general,the marginal cost curve

A supply curve shows the marginal

If marginal benefit is equal to marginal cost,then the

Overproduction results in

When a product benefits people other than the buyer of the product,the product is said to have

A monopoly is

Marginal benefit is the benefit that a person receives from consuming

What do economists call the loss society experiences when there is market failure and the production of a good is less than the efficient amount?

When economists use the term "big tradeoff" when discussing efficiency they are referring to the tradeoff between

What approach to fairness argues in favor of government policies that redistribute income so that there is more equality of income?

What must be true for a consumer to buy a good or service?

When allocative efficiency occurs,

The price of a cowboy hat is $100.Willie can produce a hat at a marginal cost of $130,Waylon can produce at a marginal cost of $100,and Merle can produce at a marginal cost of $85.Which of the following statements is correct?

When less than the efficient amount of a good is produced,how does the marginal benefit of the last unit produced compare to its marginal cost?

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