Question 1

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 C

Question 2

When the efficient quantity is produced

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) producer surplus exceeds consumer surplus by the greatest possible amount. 
E) 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) producer surplus exceeds consumer surplus by the greatest possible amount. 
E) the sum of consumer surplus and producer surplus is maximized. E

Question 3

One big problem with the utilitarian ideal is that it

Accepted Answer

A) ignores fairness. 
B) ignores equality. 
C) ignores the costs of making income transfers. 
D) all of the above. 
E) none of the above. 
A) ignores fairness. 
B) ignores equality. 
C) ignores the costs of making income transfers. 
D) all of the above. 
E) none of the above. C

Question 4

Use the figure below to answer the following question.
   Figure 5.3.4
-Refer to Figure 5.3.4.The graph shows the market for cell phones.When production is efficient,total surplus is ________ and the cost of producing the cell phones sold is ________.

Accepted Answer

A) $2,250;$2,250 
B) $2,250;$3,000 
C) $1,500;$750 
D) $750;$1,500 
E) $1,500;$2,250 
A) $2,250;$2,250 
B) $2,250;$3,000 
C) $1,500;$750 
D) $750;$1,500 
E) $1,500;$2,250

Question 5

In a command system,resources are allocated by

Accepted Answer

A) people who show interest to use the resources. 
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) people who show interest to use the resources. 
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 6

Choose the correct statement.

Accepted Answer

A) Producer surplus is an external cost. 
B) Consumer surplus is an external benefit. 
C) A government subsidy paid to a producer is an external benefit. 
D) Consumer surplus is an external cost. 
E) Subsidies lead to overproduction. 
A) Producer surplus is an external cost. 
B) Consumer surplus is an external benefit. 
C) A government subsidy paid to a producer is an external benefit. 
D) Consumer surplus is an external cost. 
E) Subsidies lead to overproduction.

Question 7

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 consumer 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 8

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 200 units,the deadweight loss 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 9

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 10

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 11

Consumer 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 benefit received from a good over the amount paid for it. 
C) the total value to consumers of a good. 
D) equal to the area under the demand curve. 
E) the total amount paid for a 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 benefit received from a good over the amount paid for it. 
C) the total value to consumers of a good. 
D) equal to the area under the demand curve. 
E) the total amount paid for a good.

Question 12

A modified version of utilitarism proposed by John Rawls could be summarized as

Accepted Answer

A) transfer everything to the poor. 
B) transfer everything to the rich. 
C) expand the size of government. 
D) minimize the size of government. 
E) make the poorest as well off as possible. 
A) transfer everything to the poor. 
B) transfer everything to the rich. 
C) expand the size of government. 
D) minimize the size of government. 
E) make the poorest as well off as possible.

Question 13

Use the figure below to answer the following questions.
   Figure 5.2.1
-Consider Figure 5.2.1.When the price is $4,what is the consumer surplus from the second unit of the good?

Accepted Answer

A) $7 
B) $3 
C) $4 
D) $1 
E) $10 
A) $7 
B) $3 
C) $4 
D) $1 
E) $10

Question 14

Suppose the government places a tax on business profits so that businesses decrease production and generate a deadweight loss.Revenues from the tax are used to boost the incomes of the poor.The decision to levy the tax implies that in this case the government

Accepted Answer

A) values people but not businesses. 
B) values efficiency more than its view of fairness. 
C) profits from collecting taxes. 
D) values its view of fairness more than efficiency. 
E) is unaware of the deadweight loss it is creating. 
A) values people but not businesses. 
B) values efficiency more than its view of fairness. 
C) profits from collecting taxes. 
D) values its view of fairness more than efficiency. 
E) is unaware of the deadweight loss it is creating.

Question 15

When the cost of making income transfers is recognized,we recognize the big tradeoff between

Accepted Answer

A) efficiency and fairness. 
B) marginal benefit and marginal cost. 
C) value and marginal benefit. 
D) producer surplus and consumer surplus. 
E) deadweight loss and utilitarianism. 
A) efficiency and fairness. 
B) marginal benefit and marginal cost. 
C) value and marginal benefit. 
D) producer surplus and consumer surplus. 
E) deadweight loss and utilitarianism.

Question 16

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 17

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

Accepted Answer

A) $20 a unit. 
B) $15 a unit. 
C) $10 a unit. 
D) $5 a unit. 
E) zero. 
A) $20 a unit. 
B) $15 a unit. 
C) $10 a unit. 
D) $5 a unit. 
E) zero.

Question 18

An external cost

Accepted Answer

A) is a marginal benefit. 
B) results in underproduction. 
C) is a payment from the government to a producer. 
D) is a cost that affects someone other than the seller. 
E) is a payment from a producer to the government. 
A) is a marginal benefit. 
B) results in underproduction. 
C) is a payment from the government to a producer. 
D) is a cost that affects someone other than the seller. 
E) is a payment from a producer to the government.

Question 19

Use the table below to answer the following questions.
Table 5.2.1
 $$\begin{array} { c c } 
\hline\begin{array} { c } 
\text { Quantity } \
\text { (units) }
\end{array} & \begin{array} { c } 
\text { Marginal Cost } \
\text { (dollars) }
\end{array} \
\hline 1 & 2 \
2 & 3 \
3 & 4 \
4 & 5\\hline
\end{array}$$
-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 20

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.

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

When the efficient quantity is produced

One big problem with the utilitarian ideal is that it

Use the figure below to answer the following question. Figure 5.3.4 -Refer to Figure 5.3.4.The graph shows the market for cell phones.When production is efficient,total surplus is and the cost of producing the cell phones sold is .

In a command system,resources are allocated by

Choose the correct statement.

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 consumer surplus is area

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 200 units,the deadweight loss is area

A negative externality results in

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

Consumer surplus is

A modified version of utilitarism proposed by John Rawls could be summarized as

Use the figure below to answer the following questions. Figure 5.2.1 -Consider Figure 5.2.1.When the price is $4,what is the consumer surplus from the second unit of the good?

Suppose the government places a tax on business profits so that businesses decrease production and generate a deadweight loss.Revenues from the tax are used to boost the incomes of the poor.The decision to levy the tax implies that in this case the government

When the cost of making income transfers is recognized,we recognize the big tradeoff between

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 5.3.1 -Refer to Figure 5.3.1.At the efficient quantity,the price is

An external cost

Use the table below to answer the following questions. Table 5.2.1 Quantity (units) Marginal Cost (dollars) 1 2 2 3 3 4 4 5 -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?

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

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

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Exam 5: Efficiency and Equity

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

When the efficient quantity is produced

One big problem with the utilitarian ideal is that it

Use the figure below to answer the following question. Figure 5.3.4 -Refer to Figure 5.3.4.The graph shows the market for cell phones.When production is efficient,total surplus is ________ and the cost of producing the cell phones sold is ________.

In a command system,resources are allocated by

Choose the correct statement.

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 consumer surplus is area

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 200 units,the deadweight loss is area

A negative externality results in

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

Consumer surplus is

A modified version of utilitarism proposed by John Rawls could be summarized as

Use the figure below to answer the following questions. Figure 5.2.1 -Consider Figure 5.2.1.When the price is $4,what is the consumer surplus from the second unit of the good?

Suppose the government places a tax on business profits so that businesses decrease production and generate a deadweight loss.Revenues from the tax are used to boost the incomes of the poor.The decision to levy the tax implies that in this case the government

When the cost of making income transfers is recognized,we recognize the big tradeoff between

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 5.3.1 -Refer to Figure 5.3.1.At the efficient quantity,the price is

An external cost

Use the table below to answer the following questions. Table 5.2.1 Quantity (units) Marginal Cost (dollars) 1 2 2 3 3 4 4 5 -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?

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

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

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Use the figure below to answer the following question. Figure 5.3.4 -Refer to Figure 5.3.4.The graph shows the market for cell phones.When production is efficient,total surplus is and the cost of producing the cell phones sold is .