Question 1

Contests do a good job in resource allocation

Accepted Answer

A) under any circumstances. 
B) when the efforts of the players are easy to monitor and reward directly. 
C) when the efforts of the players are hard to monitor and reward directly. 
D) when the first-come,first-served allocation method has failed. 
E) only under a command system. 
A) under any circumstances. 
B) when the efforts of the players are easy to monitor and reward directly. 
C) when the efforts of the players are hard to monitor and reward directly. 
D) when the first-come,first-served allocation method has failed. 
E) only under a command system.

Question 2

According to John Rawls' modified utilitarianism,income should be redistributed until

Accepted Answer

A) incomes are equal. 
B) opportunities are equal. 
C) the poorest person is as well off as possible. 
D) the poorest person is as well off as possible,after incorporating the costs of income transfers. 
E) the big tradeoff is eliminated. 
A) incomes are equal. 
B) opportunities are equal. 
C) the poorest person is as well off as possible. 
D) the poorest person is as well off as possible,after incorporating the costs of income transfers. 
E) the big tradeoff is eliminated.

Question 3

Use the figure below to answer the following questions.   Figure 5.2.3
-Refer to Figure 5.2.3 If the price is P1,what area on the graph indicates consumer surplus?

Accepted Answer

A) A 
B) B plus C 
C) D plus E 
D) A plus B plus C 
E) A plus B plus C plus D plus E 
A) A 
B) B plus C 
C) D plus E 
D) A plus B plus C 
E) A plus B plus C plus D plus E

Question 4

Use the figure below to answer the following questions.   Figure 5.2.2
-Consider the demand curve in Figure 5.2.2.What is the consumer surplus when the price is $4 a unit?

Accepted Answer

A) $98 
B) $196 
C) $4 
D) $126 
E) $56 
A) $98 
B) $196 
C) $4 
D) $126 
E) $56

Question 5

Use the figure below to answer the following questions.   Figure 5.3.1
-Refer to Figure 5.3.1.The efficient quantity is

Accepted Answer

A) 250 units. 
B) 200 units. 
C) 150 units. 
D) 100 units. 
E) 50 units. 
A) 250 units. 
B) 200 units. 
C) 150 units. 
D) 100 units. 
E) 50 units.

Question 6

Use the information below to answer the following questions.
Fact 5.3.1
Only 1 percent of the world supply of water is fit for human consumption.Some places have more water than they can use;some could use much more than they have.The 1 percent available would be sufficient if only it were in the right place.
-Refer to Fact 5.3.1.If there were a global market in water like there is in oil,

Accepted Answer

A) the supply of water would decrease. 
B) less water would be made available to countries that experience drought. 
C) supply and demand would determine the price of water and those who are willing to pay the equilibrium price would get the water. 
D) the demand for water would increase. 
E) countries with a shortage of water would pay an exorbitant price for water. 
A) the supply of water would decrease. 
B) less water would be made available to countries that experience drought. 
C) supply and demand would determine the price of water and those who are willing to pay the equilibrium price would get the water. 
D) the demand for water would increase. 
E) countries with a shortage of water would pay an exorbitant price for water.

Question 7

A used truck has a sticker price of $21,000.Arthur decides that he will pay no more than $19,750 for this truck.He buys the truck for $19,250.Arthur obtains a consumer surplus of

Accepted Answer

A) $19,750. 
B) $19,250. 
C) $1,750. 
D) $1,250. 
E) $500. 
A) $19,750. 
B) $19,250. 
C) $1,750. 
D) $1,250. 
E) $500.

Question 8

Use the figure below to answer the following questions.     Figure 5.2.5a Figure 5.2.5b
-Figure 5.2.5 shows the supply curve for Pizza House's pizzas in the left graph and the supply curve for Pizza Club's pizzas in the right graph.If the price of a pizza is $20,what is the quantity supplied by the market if Pizza House and Pizza Club are the only firms?

Accepted Answer

A) 50 
B) zero 
C) 25 
D) 75 
E) 20 
A) 50 
B) zero 
C) 25 
D) 75 
E) 20

Question 9

Marginal cost

Accepted Answer

A) is less than price. 
B) can be negative. 
C) is the minimum price that producers must receive to induce them to offer one more unit of a good or service for sale. 
D) is greater than price. 
E) decreases as more of a good or service is produced. 
A) is less than price. 
B) can be negative. 
C) is the minimum price that producers must receive to induce them to offer one more unit of a good or service for sale. 
D) is greater than price. 
E) decreases as more of a good or service is produced.

Question 10

Alvin Roth of Harvard University designed a system that matches donated kidneys to recipients waiting for such donations.This system takes into account the needs of each perspective recipient,their blood type,and the urgency of their case.Based on this information,this allocation method for kidneys is

Accepted Answer

A) first-come,first-served. 
B) force. 
C) personal characteristics. 
D) a contest. 
E) a lottery. 
A) first-come,first-served. 
B) force. 
C) personal characteristics. 
D) a contest. 
E) a lottery.

Question 11

Use the table below to answer the following questions.
Table 5.2.1  
-Table 5.2.1 gives information on marginal cost for the XYZ firm.If XYZ sells the first unit at a price of $6,what is the producer surplus on that unit?

Accepted Answer

A) $4 
B) $6 
C) $9 
D) $12 
E) $7 
A) $4 
B) $6 
C) $9 
D) $12 
E) $7

Question 12

Use the figure below to answer the following questions.   Figure 5.3.2
-Refer to Figure 5.3.2.If the level of output is 150 units,the producer surplus is area

Accepted Answer

A) BCF. 
B) ACG. 
C) DCE. 
D) ACH. 
E) HCG. 
A) BCF. 
B) ACG. 
C) DCE. 
D) ACH. 
E) HCG.

Question 13

Use the figure below to answer the following question.   Figure 5.3.3
-Consider the demand and supply curves in Figure 5.3.3.If the market is at the competitive equilibrium,which area in the diagram indicates producer surplus?

Accepted Answer

A) ABC 
B) AEC 
C) EBC 
D) 0BCD 
E) 0ECD 
A) ABC 
B) AEC 
C) EBC 
D) 0BCD 
E) 0ECD

Question 14

Majority rule allocates resources in the way that

Accepted Answer

A) politicians choose. 
B) a majority of voters choose. 
C) democracies choose. 
D) all voters choose. 
E) the military chooses. 
A) politicians choose. 
B) a majority of voters choose. 
C) democracies choose. 
D) all voters choose. 
E) the military chooses.

Question 15

Use the table below to answer the following questions.
Table 5.2.1  
-Refer to Table 5.2.1.If the price is $6 a unit,the producer surplus on the third unit is

Accepted Answer

A) $3. 
B) $6. 
C) $5. 
D) $4. 
E) $2. 
A) $3. 
B) $6. 
C) $5. 
D) $4. 
E) $2.

Question 16

When the efficient quantity is produced

Accepted Answer

A) marginal social benefit equals marginal social cost. 
B) the quantity demanded equals the quantity supplied. 
C) resources are used in the activities in which they are most highly valued. 
D) the sum of consumer surplus and producer surplus is maximized. 
E) all of the above. 
A) marginal social benefit equals marginal social cost. 
B) the quantity demanded equals the quantity supplied. 
C) resources are used in the activities in which they are most highly valued. 
D) the sum of consumer surplus and producer surplus is maximized. 
E) all of the above.

Question 17

A negative externality results in

Accepted Answer

A) underproduction. 
B) zero production. 
C) overproduction. 
D) efficient production. 
E) zero deadweight loss. 
A) underproduction. 
B) zero production. 
C) overproduction. 
D) efficient production. 
E) zero deadweight loss.

Question 18

Which of the following ideas describes the concept of "utilitarianism"? I.Utilitarianism was introduced in the 1930s.
II.Utilitarians believed that a society should strive to make as many people as happy as possible.
III.Utilitarians claimed that taking money from rich people and giving it to poorer people would not make an economy better off.

Accepted Answer

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

Question 19

Charlene is willing to pay $5.00 for a sandwich.If the price of a sandwich is ________,Charlene ________.

Accepted Answer

A) $4.00;does not receive any consumer surplus 
B) $4.00;receives a consumer surplus of $1 
C) $6.00;receives a consumer surplus of $1 
D) $4.00;receives a consumer surplus of $4 
E) $4.00;receives a producer surplus of $1 
A) $4.00;does not receive any consumer surplus 
B) $4.00;receives a consumer surplus of $1 
C) $6.00;receives a consumer surplus of $1 
D) $4.00;receives a consumer surplus of $4 
E) $4.00;receives a producer surplus of $1

Question 20

Use the information below to answer the following question.   Figure 5.2.7
-Consider the demand and supply curves in Figure 5.2.7.If the market is at the competitive equilibrium,which area in the diagram indicates the cost of producing the quantity sold?

Accepted Answer

A) ABC 
B) AEC 
C) EBC 
D) 0BCD 
E) 0ECD 
A) ABC 
B) AEC 
C) EBC 
D) 0BCD 
E) 0ECD

Contests do a good job in resource allocation

According to John Rawls' modified utilitarianism,income should be redistributed until

Use the figure below to answer the following questions. Figure 5.2.3 -Refer to Figure 5.2.3 If the price is P₁,what area on the graph indicates consumer surplus?

Use the figure below to answer the following questions. Figure 5.2.2 -Consider the demand curve in Figure 5.2.2.What is the consumer surplus when the price is $4 a unit?

Use the figure below to answer the following questions. Figure 5.3.1 -Refer to Figure 5.3.1.The efficient quantity is

A used truck has a sticker price of $21,000.Arthur decides that he will pay no more than $19,750 for this truck.He buys the truck for $19,250.Arthur obtains a consumer surplus of

Marginal cost

Use the table below to answer the following questions. Table 5.2.1 -Table 5.2.1 gives information on marginal cost for the XYZ firm.If XYZ sells the first unit at a price of $6,what is the producer surplus on that unit?

Use the figure below to answer the following questions. Figure 5.3.2 -Refer to Figure 5.3.2.If the level of output is 150 units,the producer surplus is area

Use the figure below to answer the following question. Figure 5.3.3 -Consider the demand and supply curves in Figure 5.3.3.If the market is at the competitive equilibrium,which area in the diagram indicates producer surplus?

Majority rule allocates resources in the way that

Use the table below to answer the following questions. Table 5.2.1 -Refer to Table 5.2.1.If the price is $6 a unit,the producer surplus on the third unit is

When the efficient quantity is produced

A negative externality results in

Charlene is willing to pay $5.00 for a sandwich.If the price of a sandwich is ,Charlene .

Use the information below to answer the following question. Figure 5.2.7 -Consider the demand and supply curves in Figure 5.2.7.If the market is at the competitive equilibrium,which area in the diagram indicates the cost of producing the quantity sold?

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

Contests do a good job in resource allocation

According to John Rawls' modified utilitarianism,income should be redistributed until

Use the figure below to answer the following questions. Figure 5.2.3 -Refer to Figure 5.2.3 If the price is P1,what area on the graph indicates consumer surplus?

Use the figure below to answer the following questions. Figure 5.2.2 -Consider the demand curve in Figure 5.2.2.What is the consumer surplus when the price is $4 a unit?

Use the figure below to answer the following questions. Figure 5.3.1 -Refer to Figure 5.3.1.The efficient quantity is

A used truck has a sticker price of $21,000.Arthur decides that he will pay no more than $19,750 for this truck.He buys the truck for $19,250.Arthur obtains a consumer surplus of

Marginal cost

Use the table below to answer the following questions. Table 5.2.1 -Table 5.2.1 gives information on marginal cost for the XYZ firm.If XYZ sells the first unit at a price of $6,what is the producer surplus on that unit?

Use the figure below to answer the following questions. Figure 5.3.2 -Refer to Figure 5.3.2.If the level of output is 150 units,the producer surplus is area

Use the figure below to answer the following question. Figure 5.3.3 -Consider the demand and supply curves in Figure 5.3.3.If the market is at the competitive equilibrium,which area in the diagram indicates producer surplus?

Majority rule allocates resources in the way that

Use the table below to answer the following questions. Table 5.2.1 -Refer to Table 5.2.1.If the price is $6 a unit,the producer surplus on the third unit is

When the efficient quantity is produced

A negative externality results in

Charlene is willing to pay $5.00 for a sandwich.If the price of a sandwich is ________,Charlene ________.

Use the information below to answer the following question. Figure 5.2.7 -Consider the demand and supply curves in Figure 5.2.7.If the market is at the competitive equilibrium,which area in the diagram indicates the cost of producing the quantity sold?

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

Use the figure below to answer the following questions. Figure 5.2.3 -Refer to Figure 5.2.3 If the price is P₁,what area on the graph indicates consumer surplus?

Charlene is willing to pay $5.00 for a sandwich.If the price of a sandwich is ,Charlene .