Question 1

The "fair rules" view of fairness is based on

Accepted Answer

A) income transfers from the rich to the poor. 
B) property rights and voluntary exchange. 
C) utilitarianism. 
D) the big tradeoff. 
E) allocating resources using majority rule. 
A) income transfers from the rich to the poor. 
B) property rights and voluntary exchange. 
C) utilitarianism. 
D) the big tradeoff. 
E) allocating resources using majority rule.

Question 2

Samantha was willing to pay $10 for a hamburger because she was hungry but she only paid $2.50.What is the marginal benefit Samantha gained from the hamburger?

Accepted Answer

A) $2.50 
B) $7.50 
C) $10.00 
D) $12.50 
E) None of the above answers is correct. 
A) $2.50 
B) $7.50 
C) $10.00 
D) $12.50 
E) None of the above answers is correct.

Question 3

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's total benefit from consuming 15 sodas is

Accepted Answer

A) $15.00. 
B) $26.25. 
C) $11.25. 
D) $0. 
E) None of the above answers is correct. 
A) $15.00. 
B) $26.25. 
C) $11.25. 
D) $0. 
E) None of the above answers is correct.

Question 4

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The marginal cost of the 20,000th soda is

Accepted Answer

A) $0.00. 
B) $0.50. 
C) $1.00. 
D) more than $1.00. 
E) None of the above answers is correct. 
A) $0.00. 
B) $0.50. 
C) $1.00. 
D) more than $1.00. 
E) None of the above answers is correct.

Question 5

Mark loves ice cream.At any point in time,he will buy an additional ice cream cone if

Accepted Answer

A) the marginal benefit from it exceeds the price. 
B) the marginal benefit from it is zero. 
C) his willingness to pay is less than the price. 
D) there is no deadweight loss produced by his purchase of a cone. 
E) None of the above answers is correct. 
A) the marginal benefit from it exceeds the price. 
B) the marginal benefit from it is zero. 
C) his willingness to pay is less than the price. 
D) there is no deadweight loss produced by his purchase of a cone. 
E) None of the above answers is correct.

Question 6

Why does redistribution,so that the distribution of income is equal,bring about less total output?

Accepted Answer

A) Incentives to work are reduced. 
B) No one can determine marginal benefit or marginal cost as a result. 
C) Those in political power will likely receive a larger income. 
D) Because the marginal benefit and marginal cost of work have been equally increased. 
E) The premise of the question is incorrect because an equal distribution of income would increase rather than decrease the total amount produced. 
A) Incentives to work are reduced. 
B) No one can determine marginal benefit or marginal cost as a result. 
C) Those in political power will likely receive a larger income. 
D) Because the marginal benefit and marginal cost of work have been equally increased. 
E) The premise of the question is incorrect because an equal distribution of income would increase rather than decrease the total amount produced.

Question 7

The demand curve is the same as another curve.Which curve is the same as the demand curve? Why are the curves the same?

Accepted Answer

The demand curve is the same as the marg

Question 8

The marginal benefit of each additional unit of a good consumed

Accepted Answer

A) increases as more is consumed. 
B) is always equal to its marginal cost. 
C) decreases as more is consumed. 
D) will maximize consumer surplus. 
E) is equal to the deadweight loss if the unit of the good is not produced. 
A) increases as more is consumed. 
B) is always equal to its marginal cost. 
C) decreases as more is consumed. 
D) will maximize consumer surplus. 
E) is equal to the deadweight loss if the unit of the good is not produced.

Question 9

What is producer surplus?

Accepted Answer

Producer surplus equals the di

Question 10

Jason hires Maria to tutor him in economics.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.Maria has an opportunity cost per hour of $6 for the first,$9 for the second,$12 for the third,$15 for the fourth,and $18 for the fifth.What will be the equilibrium quantity of hours tutored and the equilibrium price? Explain why this quantity and price is the equilibrium.What is Jason's consumer surplus and what is Maria's producer surplus?

Accepted Answer

The equilibrium quantity will be 4 hours

Question 11

The supply curve shows the

Accepted Answer

A) marginal benefit of a firm producing another unit of a good. 
B) dollars' worth of other goods and services we are willing to give up to get another unit of the good. 
C) minimum price that firms must receive to supply a certain quantity of a good. 
D) producer surplus of producing the good. 
E) maximum price that firms will accept in order to supply a certain quantity of a good. 
A) marginal benefit of a firm producing another unit of a good. 
B) dollars' worth of other goods and services we are willing to give up to get another unit of the good. 
C) minimum price that firms must receive to supply a certain quantity of a good. 
D) producer surplus of producing the good. 
E) maximum price that firms will accept in order to supply a certain quantity of a good.

Question 12

If the marginal benefit of a hot dog is greater than its marginal cost,then to increase efficiency,

Accepted Answer

A) more hot dogs should be produced. 
B) fewer hot dogs should be produced. 
C) nothing should be done if the marginal benefit is greater than the marginal cost by the maximum amount because in this case the efficient quantity of hot dogs is being produced. 
D) production should be halted. 
E) More information is needed about the price of a hot dog in order to determine if production should be increased,decreased,or not changed. 
A) more hot dogs should be produced. 
B) fewer hot dogs should be produced. 
C) nothing should be done if the marginal benefit is greater than the marginal cost by the maximum amount because in this case the efficient quantity of hot dogs is being produced. 
D) production should be halted. 
E) More information is needed about the price of a hot dog in order to determine if production should be increased,decreased,or not changed.

Question 13

The producer surplus of making and selling 10 chairs is found by

Accepted Answer

A) multiplying the selling price by 10. 
B) subtracting the marginal cost from the selling price for each chair and summing the differences for all 10 chairs. 
C) subtracting from the total revenue the cost of producing one chair multiplied by 10. 
D) adding the marginal cost and the price of all 10 chairs. 
E) None of the above answers is correct. 
A) multiplying the selling price by 10. 
B) subtracting the marginal cost from the selling price for each chair and summing the differences for all 10 chairs. 
C) subtracting from the total revenue the cost of producing one chair multiplied by 10. 
D) adding the marginal cost and the price of all 10 chairs. 
E) None of the above answers is correct.

Question 14

-The figure above shows Lauren's demand curve for Barbie dolls and the market price for Barbie dolls.Using the area of the consumer surplus triangle,Lauren's total consumer surplus from purchasing 3 dolls is

Accepted Answer

A) $5.50. 
B) $10.00. 
C) $22.50. 
D) $45.00. 
E) 3 dolls. 
A) $5.50. 
B) $10.00. 
C) $22.50. 
D) $45.00. 
E) 3 dolls.

Question 15

The difference between the marginal benefit from a new pair of shoes and the price of the new pair of shoes is

Accepted Answer

A) the consumer surplus from that pair of shoes. 
B) what we get. 
C) what we have to pay. 
D) the price when the marginal benefit is maximized. 
E) the consumer's expenditure on the shoes. 
A) the consumer surplus from that pair of shoes. 
B) what we get. 
C) what we have to pay. 
D) the price when the marginal benefit is maximized. 
E) the consumer's expenditure on the shoes.

Question 16

Which of the following statements is correct?

Accepted Answer

A) Consumer surplus equals the price paid for a good. 
B) The consumer surplus from a good is always larger than the total benefit from the good. 
C) An increase in price decreases consumer surplus. 
D) An increase in price has no effect on consumer surplus. 
E) The consumer surplus from a good or service must always equal producer surplus. 
A) Consumer surplus equals the price paid for a good. 
B) The consumer surplus from a good is always larger than the total benefit from the good. 
C) An increase in price decreases consumer surplus. 
D) An increase in price has no effect on consumer surplus. 
E) The consumer surplus from a good or service must always equal producer surplus.

Question 17

-In the above figure,if the quantity is restricted to 500,000 and the price is allowed to rise to set the quantity demanded equal to the quantity supplied,then area C + area E is equal to

Accepted Answer

A) deadweight loss. 
B) consumer surplus. 
C) total surplus. 
D) producer surplus. 
E) total revenue. 
A) deadweight loss. 
B) consumer surplus. 
C) total surplus. 
D) producer surplus. 
E) total revenue.

Question 18

Which of the following is necessary for allocative efficiency to be achieved?

Accepted Answer

A) Marginal benefit must be maximized. 
B) Marginal cost must be minimized. 
C) Marginal benefit must equal marginal cost. 
D) The difference between marginal benefit and marginal cost must be maximized. 
E) Production must be at a point inside the production possibilities frontier. 
A) Marginal benefit must be maximized. 
B) Marginal cost must be minimized. 
C) Marginal benefit must equal marginal cost. 
D) The difference between marginal benefit and marginal cost must be maximized. 
E) Production must be at a point inside the production possibilities frontier.

Question 19

Which of the following is true regarding a demand curve?
I.The demand curve is also the marginal benefit curve.
Ii.The demand curve shows the dollars' worth of other goods that people are willing to forgo to consume another unit of the good.
Iii.The demand curve shows the maximum price that people are willing to pay for another unit of a good.

Accepted Answer

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

Question 20

Outcomes are fair according to the

Accepted Answer

A) rules view if private property rights are established and trade is voluntary. 
B) results view if private property rights are established and trade is voluntary. 
C) rules view if there is not too much inequality. 
D) results view if there is not a big tradeoff. 
E) results view if there is equality of opportunity. 
A) rules view if private property rights are established and trade is voluntary. 
B) results view if private property rights are established and trade is voluntary. 
C) rules view if there is not too much inequality. 
D) results view if there is not a big tradeoff. 
E) results view if there is equality of opportunity.

The "fair rules" view of fairness is based on

Samantha was willing to pay $10 for a hamburger because she was hungry but she only paid $2.50.What is the marginal benefit Samantha gained from the hamburger?

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's total benefit from consuming 15 sodas is

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The marginal cost of the 20,000th soda is

Mark loves ice cream.At any point in time,he will buy an additional ice cream cone if

Why does redistribution,so that the distribution of income is equal,bring about less total output?

The demand curve is the same as another curve.Which curve is the same as the demand curve? Why are the curves the same?

The marginal benefit of each additional unit of a good consumed

What is producer surplus?

The supply curve shows the

If the marginal benefit of a hot dog is greater than its marginal cost,then to increase efficiency,

The producer surplus of making and selling 10 chairs is found by

-The figure above shows Lauren's demand curve for Barbie dolls and the market price for Barbie dolls.Using the area of the consumer surplus triangle,Lauren's total consumer surplus from purchasing 3 dolls is

The difference between the marginal benefit from a new pair of shoes and the price of the new pair of shoes is

Which of the following statements is correct?

-In the above figure,if the quantity is restricted to 500,000 and the price is allowed to rise to set the quantity demanded equal to the quantity supplied,then area C + area E is equal to

Which of the following is necessary for allocative efficiency to be achieved?

Outcomes are fair according to the

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 "fair rules" view of fairness is based on

Samantha was willing to pay $10 for a hamburger because she was hungry but she only paid $2.50.What is the marginal benefit Samantha gained from the hamburger?

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's total benefit from consuming 15 sodas is

-The figure above shows the supply curve for soda.The market price is $1.00 per soda.The marginal cost of the 20,000th soda is

Mark loves ice cream.At any point in time,he will buy an additional ice cream cone if

Why does redistribution,so that the distribution of income is equal,bring about less total output?

The demand curve is the same as another curve.Which curve is the same as the demand curve? Why are the curves the same?

The marginal benefit of each additional unit of a good consumed

What is producer surplus?

The supply curve shows the

If the marginal benefit of a hot dog is greater than its marginal cost,then to increase efficiency,

The producer surplus of making and selling 10 chairs is found by

-The figure above shows Lauren's demand curve for Barbie dolls and the market price for Barbie dolls.Using the area of the consumer surplus triangle,Lauren's total consumer surplus from purchasing 3 dolls is

The difference between the marginal benefit from a new pair of shoes and the price of the new pair of shoes is

Which of the following statements is correct?

-In the above figure,if the quantity is restricted to 500,000 and the price is allowed to rise to set the quantity demanded equal to the quantity supplied,then area C + area E is equal to

Which of the following is necessary for allocative efficiency to be achieved?

Outcomes are fair according to the

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