Question 1

Bill and Ted each consume 15 chocolate bars at the current price.If Bill's demand for chocolate bars is more elastic than Ted's demand,then

Accepted Answer

A) Bill's willingness to pay for the last chocolate bar is greater than Ted's. 
B) Ted's willingness to pay for the last chocolate bar is greater than Bill's. 
C) Bill's consumer surplus is greater than Ted's. 
D) Ted's consumer surplus is greater than Bill's. 
E) Bill's consumer surplus equals Ted's. 
A) Bill's willingness to pay for the last chocolate bar is greater than Ted's. 
B) Ted's willingness to pay for the last chocolate bar is greater than Bill's. 
C) Bill's consumer surplus is greater than Ted's. 
D) Ted's consumer surplus is greater than Bill's. 
E) Bill's consumer surplus equals Ted's.

Question 2

Sam's demand curve for pizza

Accepted Answer

A) lies below his marginal benefit curve from pizza. 
B) lies above his marginal benefit curve from pizza. 
C) is the same as his marginal benefit curve from pizza. 
D) is the same as his marginal cost curve of pizza. 
E) lies below his marginal cost curve of pizza. 
A) lies below his marginal benefit curve from pizza. 
B) lies above his marginal benefit curve from pizza. 
C) is the same as his marginal benefit curve from pizza. 
D) is the same as his marginal cost curve of pizza. 
E) lies below his marginal cost curve of pizza.

Question 3

Economists tend to

Accepted Answer

A) agree about efficiency and about fairness. 
B) agree about efficiency but disagree about fairness. 
C) disagree about efficiency but agree about fairness. 
D) be more agreeable than philosophers about fairness. 
E) be more disagreeable than philosophers about fairness. 
A) agree about efficiency and about fairness. 
B) agree about efficiency but disagree about fairness. 
C) disagree about efficiency but agree about fairness. 
D) be more agreeable than philosophers about fairness. 
E) be more disagreeable than philosophers about fairness.

Question 4

Market demand is the

Accepted Answer

A) sum of the prices that each individual is willing to pay for each quantity demanded. 
B) sum of the quantity demanded by each individual at each price. 
C) sum of the consumer surplus of each individual. 
D) difference between the maximum amount each individual is willing to pay for a good and the market price. 
E) difference between the market price and the maximum amount each individual is willing to pay for a good. 
A) sum of the prices that each individual is willing to pay for each quantity demanded. 
B) sum of the quantity demanded by each individual at each price. 
C) sum of the consumer surplus of each individual. 
D) difference between the maximum amount each individual is willing to pay for a good and the market price. 
E) difference between the market price and the maximum amount each individual is willing to pay for a good.

Question 5

The symmetry principle is based on

Accepted Answer

A) the idea that income should be redistributed from the rich to the poor. 
B) the idea that people in similar situations should be treated similarly. 
C) the fact that taxes create a deadweight loss. 
D) the idea that markets operate fairly. 
E) the idea that there is symmetry between buyers and sellers in a market. 
A) the idea that income should be redistributed from the rich to the poor. 
B) the idea that people in similar situations should be treated similarly. 
C) the fact that taxes create a deadweight loss. 
D) the idea that markets operate fairly. 
E) the idea that there is symmetry between buyers and sellers in a market.

Question 6

An oil painting has an opportunity cost of $1,000.The painting is purchased for $1,500.How much consumer surplus does the buyer obtain?

Accepted Answer

A) $1,500 
B) $1,000 
C) $500 
D) zero 
E) cannot be determined from the information given 
A) $1,500 
B) $1,000 
C) $500 
D) zero 
E) cannot be determined from the information given

Question 7

Which of the following is true?

Accepted Answer

A) When resources are allocated on the basis of personal characteristics,all people who are willing and able to pay the price get the resource. 
B) When the range of activities to be monitored is large and complex,a command system allocates resources better than a market price. 
C) When a market price allocates resources,some people who are willing and able to pay that price don't get the resource. 
D) Force provides the state with an effective method of transferring wealth from the rich to the poor. 
E) When resources are allocated by force,people with the "right" characteristics get the resources. 
A) When resources are allocated on the basis of personal characteristics,all people who are willing and able to pay the price get the resource. 
B) When the range of activities to be monitored is large and complex,a command system allocates resources better than a market price. 
C) When a market price allocates resources,some people who are willing and able to pay that price don't get the resource. 
D) Force provides the state with an effective method of transferring wealth from the rich to the poor. 
E) When resources are allocated by force,people with the "right" characteristics get the resources.

Question 8

A market demand curve is constructed by

Accepted Answer

A) adding the prices all consumers are willing to pay for any given quantity. 
B) determining the quantity supplied by all producers at all possible prices. 
C) subtracting the quantity supplied by all producers from the quantity demanded by all individuals at each price. 
D) adding the quantities demanded by all individuals at each price. 
E) subtracting the quantity demanded by all individuals from the quantity supplied by all producers at each price. 
A) adding the prices all consumers are willing to pay for any given quantity. 
B) determining the quantity supplied by all producers at all possible prices. 
C) subtracting the quantity supplied by all producers from the quantity demanded by all individuals at each price. 
D) adding the quantities demanded by all individuals at each price. 
E) subtracting the quantity demanded by all individuals from the quantity supplied by all producers at each price.

Question 9

Choose the statement or statements that are correct. I.The value of one more unit of a good or service is its marginal benefit.
II.Marginal benefit equals the total amount we spend on a good or service.
III.Marginal benefit is the maximum amount willingly paid for another unit of a good or service.

Accepted Answer

A) I only 
B) II only 
C) I and III 
D) III only 
E) I,II,and III 
A) I only 
B) II only 
C) I and III 
D) III only 
E) I,II,and III

Question 10

Use the figure below to answer the following questions.   Figure 5.3.1
-Refer to Figure 5.3.1.If the price is $15 a unit,

Accepted Answer

A) production is efficient. 
B) marginal social benefit equals marginal social cost. 
C) deadweight loss is zero. 
D) the sum of consumer surplus and producer surplus is maximized. 
E) all of the above 
A) production is efficient. 
B) marginal social benefit equals marginal social cost. 
C) deadweight loss is zero. 
D) the sum of consumer surplus and producer surplus is maximized. 
E) all of the above

Question 11

Use the figure below to answer the following questions.     Figure 5.2.4a Figure 5.2.4b
-Refer to Figure 5.2.4.If the market price is $3 a slice,what is the consumer surplus in the market?

Accepted Answer

A) $11.25 
B) $1.25 
C) $12.50 
D) $60.00 
E) zero 
A) $11.25 
B) $1.25 
C) $12.50 
D) $60.00 
E) zero

Question 12

It is efficient to produce an additional shirt if the

Accepted Answer

A) marginal social benefit from producing the shirt exceeds zero. 
B) marginal social benefit of producing the shirt equals zero. 
C) consumer surplus from the additional shirt exceeds its producer surplus. 
D) marginal social benefit from producing the shirt is greater than the marginal social cost of producing it. 
E) producer surplus from the additional shirt exceeds its consumer surplus. 
A) marginal social benefit from producing the shirt exceeds zero. 
B) marginal social benefit of producing the shirt equals zero. 
C) consumer surplus from the additional shirt exceeds its producer surplus. 
D) marginal social benefit from producing the shirt is greater than the marginal social cost of producing it. 
E) producer surplus from the additional shirt exceeds its consumer surplus.

Question 13

A market supply curve is

Accepted Answer

A) the horizontal sum of the individual supply curves. 
B) downward sloping. 
C) the vertical sum of the individual supply curves. 
D) downward sloping initially,and then upward sloping. 
E) represented by a line with a constant slope. 
A) the horizontal sum of the individual supply curves. 
B) downward sloping. 
C) the vertical sum of the individual supply curves. 
D) downward sloping initially,and then upward sloping. 
E) represented by a line with a constant slope.

Question 14

Use the figure below to answer the following questions.     Figure 5.2.4a Figure 5.2.4b
-Figure 5.2.4 shows Leo's demand curve for pizza in the left graph and Kate's demand curve for pizza in the right graph.Leo and Kate are the only two consumers in the market.If the market price is $3 a slice,what is the quantity demanded in the market?

Accepted Answer

A) 15 slices 
B) 5 slices 
C) 20 slices 
D) 10 slices 
E) 25 slices 
A) 15 slices 
B) 5 slices 
C) 20 slices 
D) 10 slices 
E) 25 slices

Question 15

Use the information below to answer the following question.   Figure 5.2.7
-Sal likes to eat pizza.The ________ is the maximum amount that Sal is willing to pay for one more slice of pizza.

Accepted Answer

A) market price 
B) marginal cost 
C) consumer surplus 
D) marginal benefit 
E) producer surplus 
A) market price 
B) marginal cost 
C) consumer surplus 
D) marginal benefit 
E) producer surplus

Question 16

When 2,000 hamburgers a day are produced,the marginal social benefit from the 2000th hamburger is $1.50 and its marginal social cost is $1.00.And when 7,500 hamburgers a day are produced,the marginal social benefit from the 7,500th hamburger is $1.00 and its marginal social cost is $1.50.The efficient quantity of hamburgers is ________ a day

Accepted Answer

A) less than 2,000 
B) between 2,000 and 7,500 
C) more than 7,500 
D) zero 
E) 2,000 
A) less than 2,000 
B) between 2,000 and 7,500 
C) more than 7,500 
D) zero 
E) 2,000

Question 17

Producer surplus is

Accepted Answer

A) the difference between the maximum price consumers are willing to pay and the minimum price producers are willing to accept. 
B) the excess of the amount received from the sale of a good or service over the cost of producing it. 
C) equal to the marginal cost of production. 
D) equal to the area under the supply curve. 
E) the total amount paid for the good. 
A) the difference between the maximum price consumers are willing to pay and the minimum price producers are willing to accept. 
B) the excess of the amount received from the sale of a good or service over the cost of producing it. 
C) equal to the marginal cost of production. 
D) equal to the area under the supply curve. 
E) the total amount paid for the good.

Question 18

In a command system,resources are allocated by

Accepted Answer

A) force. 
B) people who are able to pay for the resources. 
C) market price. 
D) the order of someone in authority. 
E) those people who come first in line. 
A) force. 
B) people who are able to pay for the resources. 
C) market price. 
D) the order of someone in authority. 
E) those people who come first in line.

Question 19

If you increase your consumption of pop by one additional can a week,your marginal benefit from this last can is $1.00.For you,the ________ this last can of pop is $1.00

Accepted Answer

A) price of 
B) marginal cost of 
C) value from 
D) consumer surplus from 
E) producer surplus 
A) price of 
B) marginal cost of 
C) value from 
D) consumer surplus from 
E) producer surplus

Question 20

Use the figure below to answer the following question.   Figure 5.3.3
-Choose the correct statement.

Accepted Answer

A) The competitive market pushes the quantity produced to its efficient level. 
B) When the efficient quantity is produced in a competitive market,consumer surplus is maximized. 
C) Competitive equilibrium occurs when demand equals supply. 
D) When the efficient quantity is produced in a competitive market,producer surplus is maximized. 
E) When the efficient quantity is produced in a competitive market,producer surplus is minimized. 
A) The competitive market pushes the quantity produced to its efficient level. 
B) When the efficient quantity is produced in a competitive market,consumer surplus is maximized. 
C) Competitive equilibrium occurs when demand equals supply. 
D) When the efficient quantity is produced in a competitive market,producer surplus is maximized. 
E) When the efficient quantity is produced in a competitive market,producer surplus is minimized.

Bill and Ted each consume 15 chocolate bars at the current price.If Bill's demand for chocolate bars is more elastic than Ted's demand,then

Sam's demand curve for pizza

Economists tend to

Market demand is the

The symmetry principle is based on

An oil painting has an opportunity cost of $1,000.The painting is purchased for $1,500.How much consumer surplus does the buyer obtain?

Which of the following is true?

A market demand curve is constructed by

Choose the statement or statements that are correct. I.The value of one more unit of a good or service is its marginal benefit. II.Marginal benefit equals the total amount we spend on a good or service. III.Marginal benefit is the maximum amount willingly paid for another unit of a good or service.

Use the figure below to answer the following questions. Figure 5.3.1 -Refer to Figure 5.3.1.If the price is $15 a unit,

Use the figure below to answer the following questions. Figure 5.2.4a Figure 5.2.4b -Refer to Figure 5.2.4.If the market price is $3 a slice,what is the consumer surplus in the market?

It is efficient to produce an additional shirt if the

A market supply curve is

Use the information below to answer the following question. Figure 5.2.7 -Sal likes to eat pizza.The ________ is the maximum amount that Sal is willing to pay for one more slice of pizza.

Producer surplus is

In a command system,resources are allocated by

If you increase your consumption of pop by one additional can a week,your marginal benefit from this last can is $1.00.For you,the ________ this last can of pop is $1.00

Use the figure below to answer the following question. Figure 5.3.3 -Choose the correct statement.

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Exam 5: Efficiency and Equity

Bill and Ted each consume 15 chocolate bars at the current price.If Bill's demand for chocolate bars is more elastic than Ted's demand,then

Sam's demand curve for pizza

Economists tend to

Market demand is the

The symmetry principle is based on

An oil painting has an opportunity cost of $1,000.The painting is purchased for $1,500.How much consumer surplus does the buyer obtain?

Which of the following is true?

A market demand curve is constructed by

Choose the statement or statements that are correct. I.The value of one more unit of a good or service is its marginal benefit. II.Marginal benefit equals the total amount we spend on a good or service. III.Marginal benefit is the maximum amount willingly paid for another unit of a good or service.

Use the figure below to answer the following questions. Figure 5.3.1 -Refer to Figure 5.3.1.If the price is $15 a unit,

Use the figure below to answer the following questions. Figure 5.2.4a Figure 5.2.4b -Refer to Figure 5.2.4.If the market price is $3 a slice,what is the consumer surplus in the market?

It is efficient to produce an additional shirt if the

A market supply curve is

Use the information below to answer the following question. Figure 5.2.7 -Sal likes to eat pizza.The ________ is the maximum amount that Sal is willing to pay for one more slice of pizza.

Producer surplus is

In a command system,resources are allocated by

If you increase your consumption of pop by one additional can a week,your marginal benefit from this last can is $1.00.For you,the ________ this last can of pop is $1.00

Use the figure below to answer the following question. Figure 5.3.3 -Choose the correct statement.

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters