Question 1

Which of the following situations describing a resource allocation method most resembles the force method?

Accepted Answer

A) Seventy percent of Austin's chess club wanted to purchase new chess sets and thirty percent did not.The club purchased the sets. 
B) Lattes are sold at Starbucks. 
C) Food from the Weld County Food Bank is distributed to families in need. 
D) Mandy saved her allowance to buy a 12 pack of cream soda.When Mandy's brother saw the soda,he took four. 
E) Jose works at Intel.His manager tells him what work needs to be completed each month. 
A) Seventy percent of Austin's chess club wanted to purchase new chess sets and thirty percent did not.The club purchased the sets. 
B) Lattes are sold at Starbucks. 
C) Food from the Weld County Food Bank is distributed to families in need. 
D) Mandy saved her allowance to buy a 12 pack of cream soda.When Mandy's brother saw the soda,he took four. 
E) Jose works at Intel.His manager tells him what work needs to be completed each month.

Question 2

Resource use is allocative efficient

Accepted Answer

A) when it is not possible to produce more of one good. 
B) when we produce goods and services that we value most highly. 
C) when most resources are fully employed. 
D) at any point on the PPF. 
E) at all points either on or within the PPF because all these production points are attainable. 
A) when it is not possible to produce more of one good. 
B) when we produce goods and services that we value most highly. 
C) when most resources are fully employed. 
D) at any point on the PPF. 
E) at all points either on or within the PPF because all these production points are attainable.

Question 3

A demand curve can be interpreted as

Accepted Answer

A) a marginal benefit curve. 
B) a total benefit curve. 
C) an average benefit curve. 
D) a marginal cost curve. 
E) None of the above answers is correct. 
A) a marginal benefit curve. 
B) a total benefit curve. 
C) an average benefit curve. 
D) a marginal cost curve. 
E) None of the above answers is correct.

Question 4

If a firm is willing to supply the 1,000th unit of a good at a price of $23 or more,we know that $23 is the

Accepted Answer

A) highest price the seller hopes to realize for this output. 
B) minimum price the seller must receive to produce this unit. 
C) average price of all the prices the seller could charge. 
D) price that sets the marginal benefit equal to the price. 
E) only price for which the seller is willing to sell this unit of the good. 
A) highest price the seller hopes to realize for this output. 
B) minimum price the seller must receive to produce this unit. 
C) average price of all the prices the seller could charge. 
D) price that sets the marginal benefit equal to the price. 
E) only price for which the seller is willing to sell this unit of the good.

Question 5

-The figure above shows the market for pants.If the efficient quantity is produced,

Accepted Answer

A) there will be no consumer surplus. 
B) the sum of consumer and producer surplus will be maximized. 
C) a small deadweight loss will result. 
D) the sum of consumer and producer surplus will be minimized. 
E) the consumer surplus on all the pants must equal the producer surplus on all the pants. 
A) there will be no consumer surplus. 
B) the sum of consumer and producer surplus will be maximized. 
C) a small deadweight loss will result. 
D) the sum of consumer and producer surplus will be minimized. 
E) the consumer surplus on all the pants must equal the producer surplus on all the pants.

Question 6

-The figure above shows Lauren's demand curve for Barbie dolls and the market price for Barbie dolls.In order for Lauren to avoid paying more for dolls than they are worth to her,she must not purchase any more than

Accepted Answer

A) 0 dolls. 
B) 1 doll. 
C) 3 dolls. 
D) 5 dolls. 
E) 4 dolls. 
A) 0 dolls. 
B) 1 doll. 
C) 3 dolls. 
D) 5 dolls. 
E) 4 dolls.

Question 7

A quantity less than the equilibrium quantity in a competitive market is inefficient because

Accepted Answer

A) the marginal benefit of another unit is greater than its marginal cost. 
B) too much of the good is being produced. 
C) the marginal cost of another unit is greater than its marginal benefit. 
D) the marginal benefit of another unit is not equal to zero. 
E) the marginal benefit is not maximized. 
A) the marginal benefit of another unit is greater than its marginal cost. 
B) too much of the good is being produced. 
C) the marginal cost of another unit is greater than its marginal benefit. 
D) the marginal benefit of another unit is not equal to zero. 
E) the marginal benefit is not maximized.

Question 8

Jason wants to hire 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.The initial equilibrium price for tutoring is $15 an hour and hence Maria tutors Jason for 4 hours.Now,Maria realizes that she is the only economics tutor because all the other tutors have graduated.Because she is the only tutor,she has a monopoly and,as a monopolist,Maria decides to charge a price of $25 instead of $15 an hour.
a.At the price of $25 an hour,how many hours will Maria tutor Jason?
b.At the initial equilibrium price of $15 an hour,what was Jason's total consumer surplus and Maria's total producer surplus?
c.At the price of $25 an hour,how many hours will Jason hire Maria to tutor him? What is Jason's total consumer surplus and Maria's total producer surplus?
d.How does the sum of Jason's consumer surplus plus Maria's producer surplus compare at the initial equilibrium price of $15 an hour (part b)and at the new price of $25 an hour (part c)? Comment on any difference.

Accepted Answer

a.Maria will tutor Jason for 2 hours.
b.

Question 9

The efficiency of competitive markets happens because

Accepted Answer

A) of the benevolence of the butcher,the brewer,and the baker. 
B) people make environmentally aware purchasing decisions. 
C) prices adjust to make buying plans and selling plans compatible. 
D) government organizes and monitors production. 
E) the U.S.economy uses a command system to allocate resources within the competitive markets. 
A) of the benevolence of the butcher,the brewer,and the baker. 
B) people make environmentally aware purchasing decisions. 
C) prices adjust to make buying plans and selling plans compatible. 
D) government organizes and monitors production. 
E) the U.S.economy uses a command system to allocate resources within the competitive markets.

Question 10

-The figure above represents the competitive market for slices of key lime pie.When 60 slices are produced,the marginal cost

Accepted Answer

A) exceeds the marginal benefit. 
B) is less than the marginal benefit. 
C) equals the marginal benefit. 
D) is not defined. 
E) equals the deadweight loss on the 60th slice. 
A) exceeds the marginal benefit. 
B) is less than the marginal benefit. 
C) equals the marginal benefit. 
D) is not defined. 
E) equals the deadweight loss on the 60th slice.

Question 11

-Bill and Krista sell potted plants from a roadside stand.The figure above shows Bill and Krista's marginal cost curve and the market price.If Bill and Krista sell 60 plants per week,their producer surplus from the 60th plant will equal

Accepted Answer

A) $8. 
B) $480. 
C) $0. 
D) $20. 
E) More information is needed to answer the question. 
A) $8. 
B) $480. 
C) $0. 
D) $20. 
E) More information is needed to answer the question.

Question 12

When society produces the combination of goods and services on the PPF that it values the most highly,society has

Accepted Answer

A) achieved only production efficiency and definitely not allocative efficiency. 
B) achieved only allocative efficiency definitely not production efficiency. 
C) achieved both production efficiency and allocative efficiency. 
D) achieved a free lunch. 
E) perhaps achieved production efficiency and has perhaps achieved allocative efficiency. 
A) achieved only production efficiency and definitely not allocative efficiency. 
B) achieved only allocative efficiency definitely not production efficiency. 
C) achieved both production efficiency and allocative efficiency. 
D) achieved a free lunch. 
E) perhaps achieved production efficiency and has perhaps achieved allocative efficiency.

Question 13

If the government takes over the distribution of some scarce good in a time of a natural disaster and provides the good at no charge to users,what must also be done?

Accepted Answer

A) The government must produce the good itself. 
B) Some rationing mechanism must be set up to determine who gets the good. 
C) Everyone hurt in the natural disaster must get one of the goods. 
D) nothing 
E) Because we live in a democracy,the government must use majority rule as the rationing mechanism. 
A) The government must produce the good itself. 
B) Some rationing mechanism must be set up to determine who gets the good. 
C) Everyone hurt in the natural disaster must get one of the goods. 
D) nothing 
E) Because we live in a democracy,the government must use majority rule as the rationing mechanism.

Question 14

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's consumer surplus from her 15th soda is

Accepted Answer

A) $0.00. 
B) $0.50. 
C) $1.00. 
D) $1.50. 
E) $2.50. 
A) $0.00. 
B) $0.50. 
C) $1.00. 
D) $1.50. 
E) $2.50.

Question 15

Allocative efficiency is achieved when the marginal benefit of a good

Accepted Answer

A) exceeds the marginal cost regardless of how much the difference is. 
B) is less than its marginal cost. 
C) is equal to its marginal cost. 
D) equals zero. 
E) exceeds the marginal cost by as much as possible. 
A) exceeds the marginal cost regardless of how much the difference is. 
B) is less than its marginal cost. 
C) is equal to its marginal cost. 
D) equals zero. 
E) exceeds the marginal cost by as much as possible.

Question 16

-The figure above shows Cindy's demand for CDs per year.
a.What is Cindy's consumer surplus on all the CDs consumed if the price of a CD is $12?
b.What is Cindy's consumer surplus on all the CDs consumed if the price of a CD is $9?
c.What happens to Cindy's consumer surplus when the price of a CD falls?

Accepted Answer

a.Her consumer surplus when the price of

Question 17

When technology increases the supply of a good and lower prices increase the quantity demanded,

Accepted Answer

A) the economy is reallocating resources to achieve an efficient allocation. 
B) consumer surplus falls. 
C) the invisible hand is unnecessary. 
D) the marginal benefit of the good increases with the quantity produced. 
E) the economy is no longer efficient because the quantity changes. 
A) the economy is reallocating resources to achieve an efficient allocation. 
B) consumer surplus falls. 
C) the invisible hand is unnecessary. 
D) the marginal benefit of the good increases with the quantity produced. 
E) the economy is no longer efficient because the quantity changes.

Question 18

When the marginal benefit and marginal cost of sodas are equal,then

Accepted Answer

A) the production of sodas might be allocatively efficient but it is definitely production inefficient. 
B) the allocatively inefficient amount of sodas is being produced. 
C) more sodas should be produced to reach the allocatively efficient quantity. 
D) fewer sodas should be produced to reach the allocatively efficient quantity. 
E) the allocatively efficient amount of sodas is being produced. 
A) the production of sodas might be allocatively efficient but it is definitely production inefficient. 
B) the allocatively inefficient amount of sodas is being produced. 
C) more sodas should be produced to reach the allocatively efficient quantity. 
D) fewer sodas should be produced to reach the allocatively efficient quantity. 
E) the allocatively efficient amount of sodas is being produced.

Question 19

The figure above shows the supply curve for pizza and the market price of pizza.
-In the figure above,the minimum price that must be offered for the 5,000th pizza a day to be produced is

Accepted Answer

A) $6. 
B) $10. 
C) $8. 
D) $2. 
E) $4. 
A) $6. 
B) $10. 
C) $8. 
D) $2. 
E) $4.

Question 20

At the market equilibrium,when efficiency is attained,the marginal benefit ________ the marginal cost.

Accepted Answer

A) is equal to 
B) is greater than 
C) is less than 
D) has no necessary relationship with 
E) is equal to the marginal deadweight loss which is equal to 
A) is equal to 
B) is greater than 
C) is less than 
D) has no necessary relationship with 
E) is equal to the marginal deadweight loss which is equal to

Which of the following situations describing a resource allocation method most resembles the force method?

Resource use is allocative efficient

A demand curve can be interpreted as

If a firm is willing to supply the 1,000th unit of a good at a price of $23 or more,we know that $23 is the

-The figure above shows the market for pants.If the efficient quantity is produced,

-The figure above shows Lauren's demand curve for Barbie dolls and the market price for Barbie dolls.In order for Lauren to avoid paying more for dolls than they are worth to her,she must not purchase any more than

A quantity less than the equilibrium quantity in a competitive market is inefficient because

The efficiency of competitive markets happens because

-The figure above represents the competitive market for slices of key lime pie.When 60 slices are produced,the marginal cost

-Bill and Krista sell potted plants from a roadside stand.The figure above shows Bill and Krista's marginal cost curve and the market price.If Bill and Krista sell 60 plants per week,their producer surplus from the 60th plant will equal

When society produces the combination of goods and services on the PPF that it values the most highly,society has

If the government takes over the distribution of some scarce good in a time of a natural disaster and provides the good at no charge to users,what must also be done?

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's consumer surplus from her 15th soda is

Allocative efficiency is achieved when the marginal benefit of a good

When technology increases the supply of a good and lower prices increase the quantity demanded,

When the marginal benefit and marginal cost of sodas are equal,then

The figure above shows the supply curve for pizza and the market price of pizza. -In the figure above,the minimum price that must be offered for the 5,000th pizza a day to be produced is

At the market equilibrium,when efficiency is attained,the marginal benefit ________ the 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

Which of the following situations describing a resource allocation method most resembles the force method?

Resource use is allocative efficient

A demand curve can be interpreted as

If a firm is willing to supply the 1,000th unit of a good at a price of $23 or more,we know that $23 is the

-The figure above shows the market for pants.If the efficient quantity is produced,

-The figure above shows Lauren's demand curve for Barbie dolls and the market price for Barbie dolls.In order for Lauren to avoid paying more for dolls than they are worth to her,she must not purchase any more than

A quantity less than the equilibrium quantity in a competitive market is inefficient because

The efficiency of competitive markets happens because

-The figure above represents the competitive market for slices of key lime pie.When 60 slices are produced,the marginal cost

-Bill and Krista sell potted plants from a roadside stand.The figure above shows Bill and Krista's marginal cost curve and the market price.If Bill and Krista sell 60 plants per week,their producer surplus from the 60th plant will equal

When society produces the combination of goods and services on the PPF that it values the most highly,society has

If the government takes over the distribution of some scarce good in a time of a natural disaster and provides the good at no charge to users,what must also be done?

-The figure above shows Diane's demand curve for soda.The price of a soda is $1.00.Diane's consumer surplus from her 15th soda is

Allocative efficiency is achieved when the marginal benefit of a good

When technology increases the supply of a good and lower prices increase the quantity demanded,

When the marginal benefit and marginal cost of sodas are equal,then

The figure above shows the supply curve for pizza and the market price of pizza. -In the figure above,the minimum price that must be offered for the 5,000th pizza a day to be produced is

At the market equilibrium,when efficiency is attained,the marginal benefit ________ the 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