Question 1

Jenn is willing to pay $75 for a purse and the purse's price is $60.What is Jenn's consumer surplus on this purse?

Accepted Answer

The consumer surplus equals the differen

Question 2

At a competitive equilibrium with no externalities,taxes,subsidies,public goods,common resources,or high transactions costs,which of the following occurs?
I.an efficient outcome
Ii.definitely a fair outcome when judged by the fair-results approach
Iii.marginal cost equals marginal benefit
Iv.producer surplus equals consumer surplus

Accepted Answer

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

Question 3

In the summer of 2008,the price of gasoline increased greatly.If the demand curve for gasoline did not shift,which of the following occurred?

Accepted Answer

A) Drivers received no consumer surplus after the price increase. 
B) Consumer surplus increased if drivers drove less. 
C) Consumer surplus decreased. 
D) If consumers drove the same amount,they received less total benefit. 
E) Both the marginal benefit from each gallon of gasoline and the consumer surplus from each gallon of gasoline decreased. 
A) Drivers received no consumer surplus after the price increase. 
B) Consumer surplus increased if drivers drove less. 
C) Consumer surplus decreased. 
D) If consumers drove the same amount,they received less total benefit. 
E) Both the marginal benefit from each gallon of gasoline and the consumer surplus from each gallon of gasoline decreased.

Question 4

Adam Smith's Wealth of Nations,written in 1776,describes the market's invisible hand representing the

Accepted Answer

A) King of England's control over the colonies. 
B) control all governments have in organizing the market. 
C) efficiency the market achieves without the interference of governments. 
D) inefficiency of markets when governments do not organize them. 
E) invisible command system that efficiently allocates resources. 
A) King of England's control over the colonies. 
B) control all governments have in organizing the market. 
C) efficiency the market achieves without the interference of governments. 
D) inefficiency of markets when governments do not organize them. 
E) invisible command system that efficiently allocates resources.

Question 5

What must be true for a consumer to enjoy a consumer surplus from a unit of a good?

Accepted Answer

The marginal benefit to the co

Question 6

If the government imposes a tax on a competitive market with no externalities,then
I.resource use is not efficient.
Ii.there is a deadweight loss.
Iii.consumer surplus is at its maximum.

Accepted Answer

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

Question 7

"Allocative efficiency in the production of cherries means that consumers can eat all of the cherries they desire." Is this statement true or false? Explain your answer.

Accepted Answer

Allocative efficiency means that we are

Question 8

Allocative efficiency is achieved when the marginal benefit of a good

Accepted Answer

A) exceeds the marginal cost by as much as possible. 
B) exceeds the marginal cost,but not by as much as possible. 
C) is less than the marginal cost. 
D) equals the marginal cost. 
E) equals zero. 
A) exceeds the marginal cost by as much as possible. 
B) exceeds the marginal cost,but not by as much as possible. 
C) is less than the marginal cost. 
D) equals the marginal cost. 
E) equals zero.

Question 9

University of Colorado reserves 5,000 free tickets to each home football game for students.Students must stand in line to receive their ticket.Football tickets are allocated through which method?

Accepted Answer

A) market price 
B) sharing equally 
C) personal characteristics 
D) first-come,first-served 
E) force 
A) market price 
B) sharing equally 
C) personal characteristics 
D) first-come,first-served 
E) force

Question 10

-In the figure above,the equilibrium market price is $20.Area A is the

Accepted Answer

A) marginal cost of 150th unit. 
B) willingness to pay for the 150th unit. 
C) producer surplus. 
D) consumer surplus. 
E) marginal benefit of 150th unit. 
A) marginal cost of 150th unit. 
B) willingness to pay for the 150th unit. 
C) producer surplus. 
D) consumer surplus. 
E) marginal benefit of 150th unit.

Question 11

Any point on the production possibility frontier is

Accepted Answer

A) attainable and might be allocatively inefficient. 
B) attainable and must be allocatively efficient. 
C) less production efficient than a point in the interior of the PPF. 
D) always allocatively efficient but might or might not be production efficient. 
E) always production efficient and always allocatively efficient. 
A) attainable and might be allocatively inefficient. 
B) attainable and must be allocatively efficient. 
C) less production efficient than a point in the interior of the PPF. 
D) always allocatively efficient but might or might not be production efficient. 
E) always production efficient and always allocatively efficient.

Question 12

When the market price rises,the consumers' consumer surplus ________.When the market price falls,the consumers' consumer surplus ________.

Accepted Answer

A) decreases;increases 
B) decreases;decreases 
C) increases;increases 
D) increases;decreases 
E) does not change;increases 
A) decreases;increases 
B) decreases;decreases 
C) increases;increases 
D) increases;decreases 
E) does not change;increases

Question 13

To achieve ________,marginal cost ________ marginal benefit.

Accepted Answer

A) production efficiency;must equal 
B) production efficiency;must be greater than 
C) allocative efficiency;must be greater than 
D) allocation efficiency;must be less than 
E) allocative efficiency;must equal 
A) production efficiency;must equal 
B) production efficiency;must be greater than 
C) allocative efficiency;must be greater than 
D) allocation efficiency;must be less than 
E) allocative efficiency;must equal

Question 14

Marginal cost is the opportunity cost of producing

Accepted Answer

A) every unit possible. 
B) zero units. 
C) the first unit and only the first unit. 
D) one more unit of a good or service. 
E) None of the above answers is correct. 
A) every unit possible. 
B) zero units. 
C) the first unit and only the first unit. 
D) one more unit of a good or service. 
E) None of the above answers is correct.

Question 15

In a figure,the consumer surplus is equal to the area ________ the ________ curve and ________ the price.

Accepted Answer

A) above;demand;above 
B) below;supply;below 
C) below;demand;below 
D) below;demand;above 
E) above;supply;below 
A) above;demand;above 
B) below;supply;below 
C) below;demand;below 
D) below;demand;above 
E) above;supply;below

Question 16

The idea of the "big tradeoff" points out the costs of

Accepted Answer

A) using a results approach to fairness when the rules approach is correct. 
B) transferring income using taxes that decrease efficiency. 
C) price hikes during natural disasters. 
D) using a rules approach to fairness when the results approach is correct. 
E) None of the above answers is correct. 
A) using a results approach to fairness when the rules approach is correct. 
B) transferring income using taxes that decrease efficiency. 
C) price hikes during natural disasters. 
D) using a rules approach to fairness when the results approach is correct. 
E) None of the above answers is correct.

Question 17

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

Accepted Answer

A) there is a shortage of slices of pie. 
B) there is a surplus of slices of pie. 
C) the efficient quantity of slices is being produced. 
D) the quantity produced is inefficient. 
E) the deadweight loss is maximized. 
A) there is a shortage of slices of pie. 
B) there is a surplus of slices of pie. 
C) the efficient quantity of slices is being produced. 
D) the quantity produced is inefficient. 
E) the deadweight loss is maximized.

Question 18

-The figure above shows the competitive market for slices of key lime pie.If the production is 40 slices per day,someone is willing to buy another slice of pie for

Accepted Answer

A) more than it costs to produce the slice. 
B) less than it costs to produce the slice. 
C) an amount equal to the cost of producing the slice. 
D) an amount equal to the cost of producing all 40 slices. 
E) an amount that is not comparable to the cost of producing the slice. 
A) more than it costs to produce the slice. 
B) less than it costs to produce the slice. 
C) an amount equal to the cost of producing the slice. 
D) an amount equal to the cost of producing all 40 slices. 
E) an amount that is not comparable to the cost of producing the slice.

Question 19

The principle of decreasing marginal benefit explains why the marginal benefit curve

Accepted Answer

A) is upward sloping. 
B) has an infinite slope. 
C) is vertical. 
D) is downward sloping. 
E) is horizontal. 
A) is upward sloping. 
B) has an infinite slope. 
C) is vertical. 
D) is downward sloping. 
E) is horizontal.

Question 20

The consumer acquires a consumer surplus on a good if the marginal benefit is

Accepted Answer

A) equal to the price. 
B) greater than the price. 
C) less than the price. 
D) zero. 
E) less than the marginal cost. 
A) equal to the price. 
B) greater than the price. 
C) less than the price. 
D) zero. 
E) less than the marginal cost.

Jenn is willing to pay $75 for a purse and the purse's price is $60.What is Jenn's consumer surplus on this purse?

In the summer of 2008,the price of gasoline increased greatly.If the demand curve for gasoline did not shift,which of the following occurred?

Adam Smith's Wealth of Nations,written in 1776,describes the market's invisible hand representing the

What must be true for a consumer to enjoy a consumer surplus from a unit of a good?

If the government imposes a tax on a competitive market with no externalities,then I.resource use is not efficient. Ii.there is a deadweight loss. Iii.consumer surplus is at its maximum.

"Allocative efficiency in the production of cherries means that consumers can eat all of the cherries they desire." Is this statement true or false? Explain your answer.

Allocative efficiency is achieved when the marginal benefit of a good

University of Colorado reserves 5,000 free tickets to each home football game for students.Students must stand in line to receive their ticket.Football tickets are allocated through which method?

-In the figure above,the equilibrium market price is $20.Area A is the

Any point on the production possibility frontier is

When the market price rises,the consumers' consumer surplus .When the market price falls,the consumers' consumer surplus .

To achieve ,marginal cost marginal benefit.

Marginal cost is the opportunity cost of producing

In a figure,the consumer surplus is equal to the area the curve and the price.

The idea of the "big tradeoff" points out the costs of

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

-The figure above shows the competitive market for slices of key lime pie.If the production is 40 slices per day,someone is willing to buy another slice of pie for

The principle of decreasing marginal benefit explains why the marginal benefit curve

The consumer acquires a consumer surplus on a good if the marginal benefit is

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

Jenn is willing to pay $75 for a purse and the purse's price is $60.What is Jenn's consumer surplus on this purse?

In the summer of 2008,the price of gasoline increased greatly.If the demand curve for gasoline did not shift,which of the following occurred?

Adam Smith's Wealth of Nations,written in 1776,describes the market's invisible hand representing the

What must be true for a consumer to enjoy a consumer surplus from a unit of a good?

If the government imposes a tax on a competitive market with no externalities,then I.resource use is not efficient. Ii.there is a deadweight loss. Iii.consumer surplus is at its maximum.

"Allocative efficiency in the production of cherries means that consumers can eat all of the cherries they desire." Is this statement true or false? Explain your answer.

Allocative efficiency is achieved when the marginal benefit of a good

University of Colorado reserves 5,000 free tickets to each home football game for students.Students must stand in line to receive their ticket.Football tickets are allocated through which method?

-In the figure above,the equilibrium market price is $20.Area A is the

Any point on the production possibility frontier is

When the market price rises,the consumers' consumer surplus ________.When the market price falls,the consumers' consumer surplus ________.

To achieve ________,marginal cost ________ marginal benefit.

Marginal cost is the opportunity cost of producing

In a figure,the consumer surplus is equal to the area ________ the ________ curve and ________ the price.

The idea of the "big tradeoff" points out the costs of

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

-The figure above shows the competitive market for slices of key lime pie.If the production is 40 slices per day,someone is willing to buy another slice of pie for

The principle of decreasing marginal benefit explains why the marginal benefit curve

The consumer acquires a consumer surplus on a good if the marginal benefit is

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

When the market price rises,the consumers' consumer surplus .When the market price falls,the consumers' consumer surplus .

To achieve ,marginal cost marginal benefit.

In a figure,the consumer surplus is equal to the area the curve and the price.