Question 1

Income equality is achieved when society achieves efficiency.

Accepted Answer

A) True 
 B)False  False

Question 2

Exhibit 7-10  
-Refer to Exhibit 7-10. What would the new equilibrium quantity be if the government assessed a tax of $3 per unit purchased on consumers?

Accepted Answer

A)  50 
B)  60 
C)  55 
D)  45 
E)  65 
A)  50 
B)  60 
C)  55 
D)  45 
E)  65 A

Question 3

The primary problem with nonmarket economic coordination is

Accepted Answer

A)  that some people get wealthy. 
B)  the possibility that efficiency will result. 
C)  the difficulty of collecting and acting on economic information. 
D)  that, without a market, exchange cannot take place. 
E)  that no one is providing central direction for the economy. 
A)  that some people get wealthy. 
B)  the possibility that efficiency will result. 
C)  the difficulty of collecting and acting on economic information. 
D)  that, without a market, exchange cannot take place. 
E)  that no one is providing central direction for the economy. C

Question 4

Which of the following statements is true?

Accepted Answer

A)  In a market system, costs and benefits are publicly posted by individual participants. 
B)  In a nonmarket system, individuals voluntarily sacrifice self-interest. 
C)  Only in a market system does greed play a motivational role. 
D)  It is easy to calculate costs and benefits in a market system. 
E)  Regardless of the economic system, it is difficult to measure all costs and benefits. 
A)  In a market system, costs and benefits are publicly posted by individual participants. 
B)  In a nonmarket system, individuals voluntarily sacrifice self-interest. 
C)  Only in a market system does greed play a motivational role. 
D)  It is easy to calculate costs and benefits in a market system. 
E)  Regardless of the economic system, it is difficult to measure all costs and benefits.

Question 5

Pareto efficiency is achieved when

Accepted Answer

A)  no one feels he or she has been overcharged for something just bought. 
B)  the greatest possible good for society has been achieved. 
C)  no individual can achieve greater utility without someone else losing utility. 
D)  everyone can be made better off without hurting anyone. 
E)  no one has more than anyone else. 
A)  no one feels he or she has been overcharged for something just bought. 
B)  the greatest possible good for society has been achieved. 
C)  no individual can achieve greater utility without someone else losing utility. 
D)  everyone can be made better off without hurting anyone. 
E)  no one has more than anyone else.

Question 6

Which of the following statements is false?

Accepted Answer

A)  If marginal cost exceeds marginal benefit, too much is being produced. 
B)  Taking money from the rich and giving it to the poor does not improve efficiency. 
C)  Three conditions must be met to achieve efficiency. 
D)  If all consumers experience the same marginal benefit, equity has resulted. 
E)  To achieve efficiency, a producer whose marginal cost is lower than his or her competitors should produce more than his or her competitors. 
A)  If marginal cost exceeds marginal benefit, too much is being produced. 
B)  Taking money from the rich and giving it to the poor does not improve efficiency. 
C)  Three conditions must be met to achieve efficiency. 
D)  If all consumers experience the same marginal benefit, equity has resulted. 
E)  To achieve efficiency, a producer whose marginal cost is lower than his or her competitors should produce more than his or her competitors.

Question 7

Deadweight loss is a measure of waste from inefficient production.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements is true?

Accepted Answer

A)  A tax assessed on producers shifts up supply. 
B)  A specific tax assessed on producers does not affect consumers. 
C)  A tax assessed on producers shifts down supply. 
D)  An ad valorem tax assessed on producers does not affect consumers 
E)  A tax assessed on producers shifts both the supply and demand curves. 
A)  A tax assessed on producers shifts up supply. 
B)  A specific tax assessed on producers does not affect consumers. 
C)  A tax assessed on producers shifts down supply. 
D)  An ad valorem tax assessed on producers does not affect consumers 
E)  A tax assessed on producers shifts both the supply and demand curves.

Question 9

In a market, buyers and sellers are coordinated through

Accepted Answer

A)  the government. 
B)  the information about price. 
C)  personal communication with each other. 
D)  information gained from outside the market. 
E)  collective bargaining in large groups. 
A)  the government. 
B)  the information about price. 
C)  personal communication with each other. 
D)  information gained from outside the market. 
E)  collective bargaining in large groups.

Question 10

Exhibit 7-13  
-Refer to Exhibit 7-13. Calculate the government's tax revenue from imposing a tax of $10 per unit on producers.

Accepted Answer

$5,000
Consumers continue to p

Question 11

Pareto efficiency is defined as a state where

Accepted Answer

A)  poverty does not exist. 
B)  no one can possibly be made worse off. 
C)  everyone can benefit from a change. 
D)  no one can benefit from a change without someone being harmed. 
E)  the lowest cost of production is achieved. 
A)  poverty does not exist. 
B)  no one can possibly be made worse off. 
C)  everyone can benefit from a change. 
D)  no one can benefit from a change without someone being harmed. 
E)  the lowest cost of production is achieved.

Question 12

Exhibit 7-10  
-Refer to Exhibit 7-10. If the government imposed on consumers a tax of $3 per unit bought, the tax revenue would be

Accepted Answer

A)  $150. 
B)  $120. 
C)  $135. 
D)  $180. 
E)  $165. 
A)  $150. 
B)  $120. 
C)  $135. 
D)  $180. 
E)  $165.

Question 13

Suppose increased oil imports raise the total supply of gasoline in the United States.

Accepted Answer

(A)
If the government does not intervene

Question 14

Does the minimum wage result in a deadweight loss? Illustrate graphically.

Accepted Answer

@#IMG-DLM& Yes, the minimum wage results in deadwe

Question 15

Exhibit 7-1  
-Refer to Exhibit 7-1. Total output in the market is 6 units. To achieve efficiency, Firm B should produce

Accepted Answer

A)  1 unit. 
B)  3 units. 
C)  4 units. 
D)  5 units. 
E)  6 units. 
A)  1 unit. 
B)  3 units. 
C)  4 units. 
D)  5 units. 
E)  6 units.

Question 16

When market supply equals market demand, then

Accepted Answer

A)  both consumer surplus and producer surplus equal zero. 
B)  consumer surplus is greater than producer surplus. 
C)  consumer surplus is less than producer surplus. 
D)  the sum of consumer surplus and producer surplus is maximized. 
E)  the sum of consumer surplus and producer surplus equals zero. 
A)  both consumer surplus and producer surplus equal zero. 
B)  consumer surplus is greater than producer surplus. 
C)  consumer surplus is less than producer surplus. 
D)  the sum of consumer surplus and producer surplus is maximized. 
E)  the sum of consumer surplus and producer surplus equals zero.

Question 17

Market equilibrium leads to the largest difference between consumer surplus and producer surplus.

Accepted Answer

A) True 
 B)False

Question 18

An ad valorem tax

Accepted Answer

A)  is proportionate to the quantity of a good sold. 
B)  increases supply by shifting the curve up. 
C)  is a percentage tax on the total value of sales. 
D)  is a tax that is paid only by producers. 
E)  is a per-unit tax on a good. 
A)  is proportionate to the quantity of a good sold. 
B)  increases supply by shifting the curve up. 
C)  is a percentage tax on the total value of sales. 
D)  is a tax that is paid only by producers. 
E)  is a per-unit tax on a good.

Question 19

Besides processing information, an economic system must perform two other tasks. Name them.

Accepted Answer

Coordinati

Question 20

The equilibrium price in a competitive equilibrium model is determined by supply and demand.

Accepted Answer

A) True 
 B)False

Income equality is achieved when society achieves efficiency.

Exhibit 7-10 -Refer to Exhibit 7-10. What would the new equilibrium quantity be if the government assessed a tax of $3 per unit purchased on consumers?

The primary problem with nonmarket economic coordination is

Which of the following statements is true?

Pareto efficiency is achieved when

Which of the following statements is false?

Deadweight loss is a measure of waste from inefficient production.

Which of the following statements is true?

In a market, buyers and sellers are coordinated through

Exhibit 7-13 -Refer to Exhibit 7-13. Calculate the government's tax revenue from imposing a tax of $10 per unit on producers.

Pareto efficiency is defined as a state where

Exhibit 7-10 -Refer to Exhibit 7-10. If the government imposed on consumers a tax of $3 per unit bought, the tax revenue would be

Suppose increased oil imports raise the total supply of gasoline in the United States.

Does the minimum wage result in a deadweight loss? Illustrate graphically.

Exhibit 7-1 -Refer to Exhibit 7-1. Total output in the market is 6 units. To achieve efficiency, Firm B should produce

When market supply equals market demand, then

Market equilibrium leads to the largest difference between consumer surplus and producer surplus.

An ad valorem tax

Besides processing information, an economic system must perform two other tasks. Name them.

The equilibrium price in a competitive equilibrium model is determined by supply and demand.

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model: Price Floors, Price Ceilings, and Elasticity

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Reading, Understanding, and Creating Graphs

Consumer Theory With Indifference Curves

Producer Theory With Isoquants

Filters

Exam 7: The Interaction of People in Markets

Income equality is achieved when society achieves efficiency.

Exhibit 7-10 -Refer to Exhibit 7-10. What would the new equilibrium quantity be if the government assessed a tax of $3 per unit purchased on consumers?

The primary problem with nonmarket economic coordination is

Which of the following statements is true?

Pareto efficiency is achieved when

Which of the following statements is false?

Deadweight loss is a measure of waste from inefficient production.

Which of the following statements is true?

In a market, buyers and sellers are coordinated through

Exhibit 7-13 -Refer to Exhibit 7-13. Calculate the government's tax revenue from imposing a tax of $10 per unit on producers.

Pareto efficiency is defined as a state where

Exhibit 7-10 -Refer to Exhibit 7-10. If the government imposed on consumers a tax of $3 per unit bought, the tax revenue would be

Suppose increased oil imports raise the total supply of gasoline in the United States.

Does the minimum wage result in a deadweight loss? Illustrate graphically.

Exhibit 7-1 -Refer to Exhibit 7-1. Total output in the market is 6 units. To achieve efficiency, Firm B should produce

When market supply equals market demand, then

Market equilibrium leads to the largest difference between consumer surplus and producer surplus.

An ad valorem tax

Besides processing information, an economic system must perform two other tasks. Name them.

The equilibrium price in a competitive equilibrium model is determined by supply and demand.

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model: Price Floors, Price Ceilings, and Elasticity

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Reading, Understanding, and Creating Graphs

Consumer Theory With Indifference Curves

Producer Theory With Isoquants

Filters