Question 1

The supply curve for CDs shows the

Accepted Answer

A)  minimum price that consumers are willing to pay if a given quantity of CDs is available. 
B)  maximum price that consumers are willing to pay if a given quantity of CDs is available. 
C)  maximum price that producers must be offered to get them to produce a given quantity of CDs. 
D)  minimum price that producers must be offered to get them to produce a given quantity of CDs. 
A)  minimum price that consumers are willing to pay if a given quantity of CDs is available. 
B)  maximum price that consumers are willing to pay if a given quantity of CDs is available. 
C)  maximum price that producers must be offered to get them to produce a given quantity of CDs. 
D)  minimum price that producers must be offered to get them to produce a given quantity of CDs.

Question 2

-The above figure shows that the maximum amount a person is willing to pay for the 400th pretzel

Accepted Answer

A)  is greater than the marginal social cost of the 400th pretzel. 
B)  is less than the marginal social benefit of the 400th pretzel. 
C)  and the marginal social benefit of the 400th pretzel are both $2. 
D)  is greater than the marginal social benefit of the 200th pretzel. 
A)  is greater than the marginal social cost of the 400th pretzel. 
B)  is less than the marginal social benefit of the 400th pretzel. 
C)  and the marginal social benefit of the 400th pretzel are both $2. 
D)  is greater than the marginal social benefit of the 200th pretzel.

Question 3

-The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. What is the marginal social benefit from the 100th pound of chocolate each day?

Accepted Answer

A)  $1.50 per pound 
B)  $1.00 per pound 
C)  $0.50 per pound 
D)  None of the above answers is correct. 
A)  $1.50 per pound 
B)  $1.00 per pound 
C)  $0.50 per pound 
D)  None of the above answers is correct.

Question 4

Explain the principle "Make the poorest as well off as possible." Who proposed it?

Accepted Answer

This principle was proposed by John Rawl

Question 5

-In the above figure, at the equilibrium price and quantity, consumer surplus is ________.

Accepted Answer

A)  $90 
B)  $60 
C)  $45 
D)  $30 
A)  $90 
B)  $60 
C)  $45 
D)  $30

Question 6

The minimum supply-price is the same as

Accepted Answer

A)  marginal cost. 
B)  market price. 
C)  producer surplus. 
D)  profit. 
A)  marginal cost. 
B)  market price. 
C)  producer surplus. 
D)  profit.

Question 7

Consumers don't always have to pay the maximum price they are willing to pay.

Accepted Answer

A) True 
 B)False

Question 8

Adam Smith argued that each person in a competitive market is led to promote the

Accepted Answer

A)  efficient use of society's resources, because each person's intention is to make society better off. 
B)  efficient use of society's resources, even though it is no person's intention to make society better off. 
C)  inefficient use of society's resources, even though each person's intention is to make society better off. 
D)  inefficient use of society's resources, because it is no person's intention to make society better off. 
A)  efficient use of society's resources, because each person's intention is to make society better off. 
B)  efficient use of society's resources, even though it is no person's intention to make society better off. 
C)  inefficient use of society's resources, even though each person's intention is to make society better off. 
D)  inefficient use of society's resources, because it is no person's intention to make society better off.

Question 9

When less than the efficient amount of a good is produced, how does the marginal social benefit of the last unit produced compare to its marginal social cost?

Accepted Answer

When less than the efficient amount of a

Question 10

-Jenn is willing to pay $75 for a purse and the purse's price is $60. What is Jenn's consumer surplus?

Accepted Answer

The consumer surplus equals the differen

Question 11

-In the above figure, if the market produces the efficient amount of purses then producer surplus equals

Accepted Answer

A)  triangle bcd. 
B)  triangle adc. 
C)  rectangle bcde. 
D)  trapezoid adec. 
A)  triangle bcd. 
B)  triangle adc. 
C)  rectangle bcde. 
D)  trapezoid adec.

Question 12

-The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. At Kaffenia's efficient quantity of doughnuts,

Accepted Answer

A)  total consumer surplus is zero. 
B)  total producer surplus is zero. 
C)  consumer surplus exceeds producer surplus by the greatest possible amount. 
D)  the sum of consumer surplus and producer surplus is maximized. 
A)  total consumer surplus is zero. 
B)  total producer surplus is zero. 
C)  consumer surplus exceeds producer surplus by the greatest possible amount. 
D)  the sum of consumer surplus and producer surplus is maximized.

Question 13

-In the above figure, the total consumer surplus at the efficient level of output is ________.

Accepted Answer

A)  $4.5 million 
B)  $9.0 million 
C)  $2.5 million 
D)  $8.5 million 
A)  $4.5 million 
B)  $9.0 million 
C)  $2.5 million 
D)  $8.5 million

Question 14

Deadweight loss can be the result of

Accepted Answer

A)  overproduction, but not underproduction. 
B)  underproduction, but not overproduction. 
C)  both overproduction and underproduction. 
D)  neither overproduction, nor underproduction. 
A)  overproduction, but not underproduction. 
B)  underproduction, but not overproduction. 
C)  both overproduction and underproduction. 
D)  neither overproduction, nor underproduction.

Question 15

Explain the difference between the "fair rules" and the "fair results" guidelines for competitive market fairness.

Accepted Answer

Economists do not agree on how to judge

Question 16

A modified version of utilitarianism proposed by John Rawls states that

Accepted Answer

A)  the distribution of the economic pie is fair if the rules are fair. 
B)  the distribution of the economic pie is fair if it achieves the greatest happiness for the greatest number of people. 
C)  the fair distribution of the economic pie is the one that makes the poorest person as well off as possible. 
D)  goods may be transferred from one person to another only by voluntary exchange. 
A)  the distribution of the economic pie is fair if the rules are fair. 
B)  the distribution of the economic pie is fair if it achieves the greatest happiness for the greatest number of people. 
C)  the fair distribution of the economic pie is the one that makes the poorest person as well off as possible. 
D)  goods may be transferred from one person to another only by voluntary exchange.

Question 17

As long as production is such that marginal social benefit is greater than marginal social cost, an efficient outcome occurs.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is true?

Accepted Answer

A)  At the efficient quantity, marginal social benefit equals marginal social cost. 
B)  Marginal social cost increases as the quantity produced decreases. 
C)  Marginal social benefit decreases as the quantity consumed decreases. 
D)  If marginal social benefit exceeds marginal social cost by as much as possible, production is efficient. 
A)  At the efficient quantity, marginal social benefit equals marginal social cost. 
B)  Marginal social cost increases as the quantity produced decreases. 
C)  Marginal social benefit decreases as the quantity consumed decreases. 
D)  If marginal social benefit exceeds marginal social cost by as much as possible, production is efficient.

Question 19

-The figure above shows the market for milk. If the efficient quantity of milk is produced, the producer surplus is

Accepted Answer

A)  $100. 
B)  $400. 
C)  $200. 
D)  $600. 
A)  $100. 
B)  $400. 
C)  $200. 
D)  $600.

Question 20

What is the relationship between the marginal social benefit curve and the market demand curve. Explain.

Accepted Answer

The market demand curve is also the marg

Exam 5: Efficiency and Equity

The supply curve for CDs shows the

-The above figure shows that the maximum amount a person is willing to pay for the 400th pretzel

-The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. What is the marginal social benefit from the 100th pound of chocolate each day?

Explain the principle "Make the poorest as well off as possible." Who proposed it?

-In the above figure, at the equilibrium price and quantity, consumer surplus is ________.

The minimum supply-price is the same as

Consumers don't always have to pay the maximum price they are willing to pay.

Adam Smith argued that each person in a competitive market is led to promote the

When less than the efficient amount of a good is produced, how does the marginal social benefit of the last unit produced compare to its marginal social cost?

-Jenn is willing to pay $75 for a purse and the purse's price is $60. What is Jenn's consumer surplus?

-In the above figure, if the market produces the efficient amount of purses then producer surplus equals

-The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. At Kaffenia's efficient quantity of doughnuts,

-In the above figure, the total consumer surplus at the efficient level of output is ________.

Deadweight loss can be the result of

Explain the difference between the "fair rules" and the "fair results" guidelines for competitive market fairness.

A modified version of utilitarianism proposed by John Rawls states that

As long as production is such that marginal social benefit is greater than marginal social cost, an efficient outcome occurs.

Which of the following statements is true?

-The figure above shows the market for milk. If the efficient quantity of milk is produced, the producer surplus is

What is the relationship between the marginal social benefit curve and the market demand curve. Explain.

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

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices and Public Goods

Externalities and the Environment

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Extension A: Review

Extension B: Review

Extension C: Review

Extension D: Review

Extension E: Review

Extension F: Review

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