Question 1

-In the above figure,if the quantity is equal to 2,500,000 units,the deadweight loss is equal to

Accepted Answer

A)  area B + area F. 
B)  area D + area I. 
C)  area C. 
D)  area G + area H. 
E)  None of the above answers is correct because the deadweight loss is equal to zero. 
A)  area B + area F. 
B)  area D + area I. 
C)  area C. 
D)  area G + area H. 
E)  None of the above answers is correct because the deadweight loss is equal to zero.

Question 2

Maria helps tutor students taking economics.The equilibrium price for tutoring is $15 per hour.Maria has determined her opportunity cost per hour to be $6 for the first,$9 for the second,$12 for the third,$15 for the fourth,and $18 for the fifth.How many hours will Maria tutor? Why this amount of hours? What,if any,is Maria's producer surplus?

Accepted Answer

Maria will tutor for 4 hours.For all of

Question 3

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 4

Producer surplus

Accepted Answer

A)  increases if market price rises and the supply curve does not shift. 
B)  decreases if market price rises and the supply curve does not shift. 
C)  is equal to the maximum price consumers are willing to pay. 
D)  is the same as the marginal cost. 
E)  always must equal consumer surplus. 
A)  increases if market price rises and the supply curve does not shift. 
B)  decreases if market price rises and the supply curve does not shift. 
C)  is equal to the maximum price consumers are willing to pay. 
D)  is the same as the marginal cost. 
E)  always must equal consumer surplus.

Question 5

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.At 1 manatee swim per week,Kaley's marginal benefit is ________ and Scott's marginal cost is ________.

Accepted Answer

A)  $40; $10 
B)  $40; $40 
C)  $90; $50 
D)  None of the above answers is correct. 
A)  $40; $10 
B)  $40; $40 
C)  $90; $50 
D)  None of the above answers is correct.

Question 6

If the demand for a good does not change,how will an increase in the price of that good affect the consumer surplus from it?

Accepted Answer

The consumer surplus equals the differen

Question 7

If a firm produces five chairs with marginal costs of $25,$30,$40,$55,and $75,respectively,and sells them for $80 each,what is the firm's total producer surplus?

Accepted Answer

A)  $400 
B)  $225 
C)  $175 
D)  $150 
E)  $80 
A)  $400 
B)  $225 
C)  $175 
D)  $150 
E)  $80

Question 8

When a society achieves production efficiency,it is

Accepted Answer

A)  definitely producing at a point on its PPF. 
B)  perhaps producing at a point on its PPF and perhaps producing at a point inside its PPF. 
C)  definitely producing that combination of goods and services that society values most highly. 
D)  not fully employing all of its available resources to produce goods and services. 
E)  enjoying a free lunch. 
A)  definitely producing at a point on its PPF. 
B)  perhaps producing at a point on its PPF and perhaps producing at a point inside its PPF. 
C)  definitely producing that combination of goods and services that society values most highly. 
D)  not fully employing all of its available resources to produce goods and services. 
E)  enjoying a free lunch.

Question 9

The concept of "the invisible hand" suggests that

Accepted Answer

A)  products are produced out of a seller's sense of charity. 
B)  when the seller is better off, the buyer is worse off. 
C)  sellers exploit consumers with high prices. 
D)  buyers and sellers are self-interested. 
E)  the command system is the only way of efficiently allocating resources. 
A)  products are produced out of a seller's sense of charity. 
B)  when the seller is better off, the buyer is worse off. 
C)  sellers exploit consumers with high prices. 
D)  buyers and sellers are self-interested. 
E)  the command system is the only way of efficiently allocating resources.

Question 10

In December 2010,Kansas had a severe ice storm that caused electrical blackouts.The Fictitious Portable Generator firm of Lawrence had several portable generators that could be used by homeowners to provide electricity.Which of the following would be the fair-rules way to provide them?

Accepted Answer

A)  The government confiscates the generators owned by Fictitious and distributes them. 
B)  Fictitious is forced by the state to rent the generators at half the normal rate. 
C)  The state sets up a lottery to determine who rents the available generators at the normal rate. 
D)  Fictitious rents generators at the equilibrium market price. 
E)  Fictitious follows government commands about who gets to use the generators. 
A)  The government confiscates the generators owned by Fictitious and distributes them. 
B)  Fictitious is forced by the state to rent the generators at half the normal rate. 
C)  The state sets up a lottery to determine who rents the available generators at the normal rate. 
D)  Fictitious rents generators at the equilibrium market price. 
E)  Fictitious follows government commands about who gets to use the generators.

Question 11

The cost of producing one more unit of a good or service is equal to its

Accepted Answer

A)  marginal benefit. 
B)  producer surplus. 
C)  marginal expenditure. 
D)  consumer surplus. 
E)  marginal cost. 
A)  marginal benefit. 
B)  producer surplus. 
C)  marginal expenditure. 
D)  consumer surplus. 
E)  marginal cost.

Question 12

Consumer surplus exists when a

Accepted Answer

A)  person buys something with a marginal benefit less than what they paid. 
B)  person buys something with a marginal benefit exactly what they paid. 
C)  person buys something with a marginal benefit more than what they paid. 
D)  producer sells something for more than it is worth. 
E)  person buys something with a marginal cost less than what they paid. 
A)  person buys something with a marginal benefit less than what they paid. 
B)  person buys something with a marginal benefit exactly what they paid. 
C)  person buys something with a marginal benefit more than what they paid. 
D)  producer sells something for more than it is worth. 
E)  person buys something with a marginal cost less than what they paid.

Question 13

The maximum amount of other goods and services that people are willing to give up in order to get one more unit of a good is defined as the good's

Accepted Answer

A)  marginal benefit. 
B)  total benefit. 
C)  marginal cost. 
D)  total cost. 
E)  price. 
A)  marginal benefit. 
B)  total benefit. 
C)  marginal cost. 
D)  total cost. 
E)  price.

Question 14

Which of the following is true for taxes? They

Accepted Answer

A)  are always administered fairly. 
B)  are a necessary part of living in an economy with a fair distribution of income. 
C)  are always administered without creating unfairness or inefficiency. 
D)  are an involuntary transfer of private property. 
E)  do not create a big tradeoff problem. 
A)  are always administered fairly. 
B)  are a necessary part of living in an economy with a fair distribution of income. 
C)  are always administered without creating unfairness or inefficiency. 
D)  are an involuntary transfer of private property. 
E)  do not create a big tradeoff problem.

Question 15

At a competitive equilibrium,if there are no taxes,subsidies,price regulations,quantity regulations,or externalities,

Accepted Answer

A)  the marginal benefit is greater than the marginal cost. 
B)  resource use is efficient. 
C)  the marginal benefit is less than the marginal cost. 
D)  both the marginal benefit and the marginal cost of the last unit produced equal zero. 
E)  the marginal benefit is greater than the marginal cost by as much as possible. 
A)  the marginal benefit is greater than the marginal cost. 
B)  resource use is efficient. 
C)  the marginal benefit is less than the marginal cost. 
D)  both the marginal benefit and the marginal cost of the last unit produced equal zero. 
E)  the marginal benefit is greater than the marginal cost by as much as possible.

Question 16

What are some of the potential obstacles that can lead to market failure by preventing a market from reaching the efficient outcome? Briefly define each obstacle.

Accepted Answer

The obstacles basically fall into two ca

Question 17

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 18

The marginal benefit of a taco is measured by

Accepted Answer

A)  the price of the taco. 
B)  the amount of another good a person is willing to give up to get one more taco. 
C)  the amount of another good a person must give up to get one more taco. 
D)  a point on the PPF. 
E)  the opportunity cost of producing another taco. 
A)  the price of the taco. 
B)  the amount of another good a person is willing to give up to get one more taco. 
C)  the amount of another good a person must give up to get one more taco. 
D)  a point on the PPF. 
E)  the opportunity cost of producing another taco.

Question 19

What is the "invisible hand"?

Accepted Answer

The invisible hand is a concept articula

Question 20

To achieve allocative efficiency,one must compare the

Accepted Answer

A)  marginal cost of a good to its opportunity cost. 
B)  opportunity cost to the attainable point on the production possibilities frontier. 
C)  marginal benefit of a good to its marginal cost. 
D)  marginal cost to the production efficiency cost. 
E)  point of production efficiency to the point of allocative efficiency. 
A)  marginal cost of a good to its opportunity cost. 
B)  opportunity cost to the attainable point on the production possibilities frontier. 
C)  marginal benefit of a good to its marginal cost. 
D)  marginal cost to the production efficiency cost. 
E)  point of production efficiency to the point of allocative efficiency.

-In the above figure,if the quantity is equal to 2,500,000 units,the deadweight loss is equal to

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

Producer surplus

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.At 1 manatee swim per week,Kaley's marginal benefit is and Scott's marginal cost is .

If the demand for a good does not change,how will an increase in the price of that good affect the consumer surplus from it?

If a firm produces five chairs with marginal costs of $25,$30,$40,$55,and $75,respectively,and sells them for $80 each,what is the firm's total producer surplus?

When a society achieves production efficiency,it is

The concept of "the invisible hand" suggests that

In December 2010,Kansas had a severe ice storm that caused electrical blackouts.The Fictitious Portable Generator firm of Lawrence had several portable generators that could be used by homeowners to provide electricity.Which of the following would be the fair-rules way to provide them?

The cost of producing one more unit of a good or service is equal to its

Consumer surplus exists when a

The maximum amount of other goods and services that people are willing to give up in order to get one more unit of a good is defined as the good's

Which of the following is true for taxes? They

At a competitive equilibrium,if there are no taxes,subsidies,price regulations,quantity regulations,or externalities,

What are some of the potential obstacles that can lead to market failure by preventing a market from reaching the efficient outcome? Briefly define each obstacle.

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

The marginal benefit of a taco is measured by

What is the "invisible hand"?

To achieve allocative efficiency,one must compare the

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 6: Efficiency and Fairness of Markets

-In the above figure,if the quantity is equal to 2,500,000 units,the deadweight loss is equal to

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

Producer surplus

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.At 1 manatee swim per week,Kaley's marginal benefit is ________ and Scott's marginal cost is ________.

If the demand for a good does not change,how will an increase in the price of that good affect the consumer surplus from it?

If a firm produces five chairs with marginal costs of $25,$30,$40,$55,and $75,respectively,and sells them for $80 each,what is the firm's total producer surplus?

When a society achieves production efficiency,it is

The concept of "the invisible hand" suggests that

In December 2010,Kansas had a severe ice storm that caused electrical blackouts.The Fictitious Portable Generator firm of Lawrence had several portable generators that could be used by homeowners to provide electricity.Which of the following would be the fair-rules way to provide them?

The cost of producing one more unit of a good or service is equal to its

Consumer surplus exists when a

The maximum amount of other goods and services that people are willing to give up in order to get one more unit of a good is defined as the good's

Which of the following is true for taxes? They

At a competitive equilibrium,if there are no taxes,subsidies,price regulations,quantity regulations,or externalities,

What are some of the potential obstacles that can lead to market failure by preventing a market from reaching the efficient outcome? Briefly define each obstacle.

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

The marginal benefit of a taco is measured by

What is the "invisible hand"?

To achieve allocative efficiency,one must compare the

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

-The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours.At 1 manatee swim per week,Kaley's marginal benefit is and Scott's marginal cost is .