Question 1

To an economist,"value" is the same as

Accepted Answer

A)  marginal cost. 
B)  consumer surplus. 
C)  the minimum price that people are willing to pay for another unit of the good. 
D)  marginal benefit. 
E)  total surplus. 
A)  marginal cost. 
B)  consumer surplus. 
C)  the minimum price that people are willing to pay for another unit of the good. 
D)  marginal benefit. 
E)  total surplus.

Question 2

To determine how much of a good to produce to achieve allocative efficiency,we

Accepted Answer

A)  construct a production possibilities frontier and choose the midpoint. 
B)  construct a production possibilities frontier and choose any point on it. 
C)  must produce on the PPF and at the point where the marginal benefit and marginal cost of the good are equal. 
D)  must produce on the PPF and at the point where the marginal benefit exceeds by any amount the marginal cost of the good. 
E)  must produce on the PPF and at the point where the marginal benefit exceeds by as much as possible the marginal cost of the good. 
A)  construct a production possibilities frontier and choose the midpoint. 
B)  construct a production possibilities frontier and choose any point on it. 
C)  must produce on the PPF and at the point where the marginal benefit and marginal cost of the good are equal. 
D)  must produce on the PPF and at the point where the marginal benefit exceeds by any amount the marginal cost of the good. 
E)  must produce on the PPF and at the point where the marginal benefit exceeds by as much as possible the marginal cost of the good.

Question 3

The resource allocation method used for the online auctions on eBay is

Accepted Answer

A)  market price. 
B)  lottery. 
C)  contest. 
D)  first-come, first-served. 
E)  sharing equally. 
A)  market price. 
B)  lottery. 
C)  contest. 
D)  first-come, first-served. 
E)  sharing equally.

Question 4

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 5

Which of the following is an example of consumer surplus?

Accepted Answer

A)  Jose buys a hamburger for $2 and tells you he would not have paid a penny more. 
B)  John believes the price he paid for his computer was too high. 
C)  Mary buys a paper tablet for $2 and finds the same good at another store for $1.50. 
D)  Sue would have paid $15 for a new compact disc but paid only $10. 
E)  Anne finds a mountain bike for which she is willing to pay a maximum of $550 and the price of the bike is $600. 
A)  Jose buys a hamburger for $2 and tells you he would not have paid a penny more. 
B)  John believes the price he paid for his computer was too high. 
C)  Mary buys a paper tablet for $2 and finds the same good at another store for $1.50. 
D)  Sue would have paid $15 for a new compact disc but paid only $10. 
E)  Anne finds a mountain bike for which she is willing to pay a maximum of $550 and the price of the bike is $600.

Question 6

The producer surplus is found by subtracting the ________ and then adding the difference for all units sold.

Accepted Answer

A)  marginal cost from price 
B)  price from marginal cost 
C)  marginal benefit from total benefit 
D)  marginal cost from marginal benefit 
E)  deadweight loss from the price 
A)  marginal cost from price 
B)  price from marginal cost 
C)  marginal benefit from total benefit 
D)  marginal cost from marginal benefit 
E)  deadweight loss from the price

Question 7

Mandy saved her allowance to buy a 12 pack of cream soda.When Mandy's brother saw the soda,he took four.Sodas were allocated between Mandy and her brother through

Accepted Answer

A)  force. 
B)  majority rule. 
C)  first-come, first-served. 
D)  sharing equally. 
E)  personal characteristics. 
A)  force. 
B)  majority rule. 
C)  first-come, first-served. 
D)  sharing equally. 
E)  personal characteristics.

Question 8

-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 9

The figure above shows the market for pizza.
-In the figure above,when the market is in equilibrium,marginal benefit ________ marginal cost,so the quantity of pizza produced is ________.

Accepted Answer

A)  equals; efficient 
B)  exceeds; efficient 
C)  is below; efficient 
D)  is below; not efficient 
E)  exceeds; not efficient 
A)  equals; efficient 
B)  exceeds; efficient 
C)  is below; efficient 
D)  is below; not efficient 
E)  exceeds; not efficient

Question 10

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 11

Suppose a market produces 5,000 tons of wheat.At this quantity,the marginal cost exceeds the marginal benefit.This outcome could be the result of

Accepted Answer

A)  a quantity regulation limiting the amount that can be produced. 
B)  a monopoly. 
C)  a subsidy. 
D)  an external benefit. 
E)  producing a public good. 
A)  a quantity regulation limiting the amount that can be produced. 
B)  a monopoly. 
C)  a subsidy. 
D)  an external benefit. 
E)  producing a public good.

Question 12

Draw and describe a marginal benefit curve for slices of pizza where the opportunity cost of consuming a slice of pizza is a taco.

Accepted Answer

@#IMG-DLM& A marginal benefit curve is drawn as a

Question 13

Allocative efficiency occurs when

Accepted Answer

A)  the most highly valued goods and services are produced. 
B)  all citizens have equal access to goods and services. 
C)  the environment is protected at all cost. 
D)  goods and services are free. 
E)  production takes place at any point on the PPF. 
A)  the most highly valued goods and services are produced. 
B)  all citizens have equal access to goods and services. 
C)  the environment is protected at all cost. 
D)  goods and services are free. 
E)  production takes place at any point on the PPF.

Question 14

Briefly describe the concept of the "invisible hand."

Accepted Answer

The invisible hand suggests that a compe

Question 15

-In the figure above,suppose the market is at equilibrium.Then area B is the

Accepted Answer

A)  marginal benefit. 
B)  marginal cost. 
C)  amount of the consumer surplus. 
D)  amount of the producer surplus. 
E)  deadweight loss. 
A)  marginal benefit. 
B)  marginal cost. 
C)  amount of the consumer surplus. 
D)  amount of the producer surplus. 
E)  deadweight loss.

Question 16

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 17

The figure above shows the demand curve for pizza and the market price of pizza.
-In the figure above,what is the consumer surplus per day?

Accepted Answer

A)  $100,000 
B)  $50,000 
C)  $125,000 
D)  $150,000 
E)  zero 
A)  $100,000 
B)  $50,000 
C)  $125,000 
D)  $150,000 
E)  zero

Question 18

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

Accepted Answer

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

Question 19

-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 20

Although Jack and Vanessa were equally qualified,Jack was promoted to manager instead of Vanessa because the president of the company thought that the other employees would not respect a female manager.The resource,the management position,was allocated in what manner?

Accepted Answer

A)  sharing equally 
B)  contest 
C)  personal characteristics 
D)  command 
E)  lottery 
A)  sharing equally 
B)  contest 
C)  personal characteristics 
D)  command 
E)  lottery

To an economist,"value" is the same as

To determine how much of a good to produce to achieve allocative efficiency,we

The resource allocation method used for the online auctions on eBay is

Which of the following is an example of consumer surplus?

The producer surplus is found by subtracting the ________ and then adding the difference for all units sold.

Mandy saved her allowance to buy a 12 pack of cream soda.When Mandy's brother saw the soda,he took four.Sodas were allocated between Mandy and her brother through

-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

The figure above shows the market for pizza. -In the figure above,when the market is in equilibrium,marginal benefit marginal cost,so the quantity of pizza produced is .

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

Suppose a market produces 5,000 tons of wheat.At this quantity,the marginal cost exceeds the marginal benefit.This outcome could be the result of

Draw and describe a marginal benefit curve for slices of pizza where the opportunity cost of consuming a slice of pizza is a taco.

Allocative efficiency occurs when

Briefly describe the concept of the "invisible hand."

-In the figure above,suppose the market is at equilibrium.Then area B is the

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

The figure above shows the demand curve for pizza and the market price of pizza. -In the figure above,what is the consumer surplus per day?

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

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

Although Jack and Vanessa were equally qualified,Jack was promoted to manager instead of Vanessa because the president of the company thought that the other employees would not respect a female manager.The resource,the management position,was allocated in what manner?

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

To an economist,"value" is the same as

To determine how much of a good to produce to achieve allocative efficiency,we

The resource allocation method used for the online auctions on eBay is

Which of the following is an example of consumer surplus?

The producer surplus is found by subtracting the ________ and then adding the difference for all units sold.

Mandy saved her allowance to buy a 12 pack of cream soda.When Mandy's brother saw the soda,he took four.Sodas were allocated between Mandy and her brother through

-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

The figure above shows the market for pizza. -In the figure above,when the market is in equilibrium,marginal benefit ________ marginal cost,so the quantity of pizza produced is ________.

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

Suppose a market produces 5,000 tons of wheat.At this quantity,the marginal cost exceeds the marginal benefit.This outcome could be the result of

Draw and describe a marginal benefit curve for slices of pizza where the opportunity cost of consuming a slice of pizza is a taco.

Allocative efficiency occurs when

Briefly describe the concept of the "invisible hand."

-In the figure above,suppose the market is at equilibrium.Then area B is the

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

The figure above shows the demand curve for pizza and the market price of pizza. -In the figure above,what is the consumer surplus per day?

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

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

Although Jack and Vanessa were equally qualified,Jack was promoted to manager instead of Vanessa because the president of the company thought that the other employees would not respect a female manager.The resource,the management position,was allocated in what manner?

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 the market for pizza. -In the figure above,when the market is in equilibrium,marginal benefit marginal cost,so the quantity of pizza produced is .

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