Question 1

An oil painting has a marginal cost of $1,000.The painting was bought for $1,500.How much producer surplus did the painter 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 2

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 3

An oil painting has an opportunity cost of $1,000.The painting was purchased for $1,500.How much consumer surplus did 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 4

The main idea of fairness is based on which of the following rules? a.The state must enforce laws that establish and protect private property.
B.Goods and services that produce externalities must be owned by the state,monopolies must be eliminated,and common resources must follow the rules of the competitive market.
C.The state must enforce tax laws so that after taxes are paid and benefits are received,the gap between rich and poor is as small as possible.
D.Private property may be transferred from one person to another only by voluntary exchange.

Accepted Answer

A) Rules a and d. 
B) Rules b and d. 
C) Rules b and c. 
D) Rules a and c. 
E) The main idea of fairness is not based on any of these rules. 
A) Rules a and d. 
B) Rules b and d. 
C) Rules b and c. 
D) Rules a and c. 
E) The main idea of fairness is not based on any of these rules.

Question 5

Lotteries work best

Accepted Answer

A) under any circumstances. 
B) under the first-come,first served allocation method. 
C) when there is no effective way to distinguish among potential users of a scarce resource. 
D) when potential users of scarce resources are unknown. 
E) under a command system. 
A) under any circumstances. 
B) under the first-come,first served allocation method. 
C) when there is no effective way to distinguish among potential users of a scarce resource. 
D) when potential users of scarce resources are unknown. 
E) under a command system.

Question 6

When a deadweight loss occurs in a market,we can be certain that

Accepted Answer

A) taxes have been imposed in the market. 
B) the market is a monopoly. 
C) there is underproduction in the market. 
D) the entire economy experiences a loss. 
E) both A and C. 
A) taxes have been imposed in the market. 
B) the market is a monopoly. 
C) there is underproduction in the market. 
D) the entire economy experiences a loss. 
E) both A and C.

Question 7

Use the information below to answer the following question.
   Figure 5.2.3
-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 8

The essence of philosopher Robert Nozick's proposal is that

Accepted Answer

A) fairness works on the basis of fair outcomes. 
B) fairness must be based on fairness of rules. 
C) involuntary exchange is fair. 
D) all of the above. 
E) none of the above. 
A) fairness works on the basis of fair outcomes. 
B) fairness must be based on fairness of rules. 
C) involuntary exchange is fair. 
D) all of the above. 
E) none of the above.

Question 9

Use the figure below to answer the following questions.
   Figure 5.2.2
-Refer to Figure 5.2.2 If the price is P1,consumer surplus is

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 10

An idea of fairness that emphasizes equality of opportunity is

Accepted Answer

A) fair results. 
B) fair rules. 
C) fair incomes. 
D) utilitarianism. 
E) modified utilitarianism. 
A) fair results. 
B) fair rules. 
C) fair incomes. 
D) utilitarianism. 
E) modified utilitarianism.

Question 11

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) is downward sloping initially,and then upward sloping. 
E) is 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) is downward sloping initially,and then upward sloping. 
E) is represented by a line with a constant slope.

Question 12

Use the figure below to answer the following questions.
   Figure 5.2.2
-Refer to Figure 5.2.2.If the price rises from P0 to P1,the change in consumer surplus is

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 13

Consider the market for hot dogs.If this market becomes a monopoly,then there will be

Accepted Answer

A) underproduction of hot dogs. 
B) overproduction of hot dogs. 
C) a deadweight loss in the market for hot dogs. 
D) an efficient quantity of hot dogs. 
E) both A and C are correct. 
A) underproduction of hot dogs. 
B) overproduction of hot dogs. 
C) a deadweight loss in the market for hot dogs. 
D) an efficient quantity of hot dogs. 
E) both A and C are correct.

Question 14

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 2000th 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 15

Marginal cost

Accepted Answer

A) is always less than price. 
B) can be negative. 
C) is the minimum price a producer must receive to induce him 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 always less than price. 
B) can be negative. 
C) is the minimum price a producer must receive to induce him 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 16

All of the following statements are true except ________.

Accepted Answer

A) an externality is a cost or a benefit that affects someone other than the seller or the buyer of a good 
B) when an electric utility does not consider the cost of pollution when it decides how much power to produce,the result is overproduction 
C) an electric utility creates an external cost by burning coal 
D) all externalities create overproduction 
E) an external cost creates overproduction 
A) an externality is a cost or a benefit that affects someone other than the seller or the buyer of a good 
B) when an electric utility does not consider the cost of pollution when it decides how much power to produce,the result is overproduction 
C) an electric utility creates an external cost by burning coal 
D) all externalities create overproduction 
E) an external cost creates overproduction

Question 17

As a method of resource allocation,force

Accepted Answer

A) plays a crucial negative role but not a positive role. 
B) plays a crucial positive role but not a negative role. 
C) plays a crucial role for both good and ill. 
D) is always better than majority rule. 
E) is always better than first-come,first-served. 
A) plays a crucial negative role but not a positive role. 
B) plays a crucial positive role but not a negative role. 
C) plays a crucial role for both good and ill. 
D) is always better than majority rule. 
E) is always better than first-come,first-served.

Question 18

Use the table below to answer the following questions.
Table 5.2.1
 $$\begin{array} { c c } 
\hline\begin{array} { c } 
\text { Quantity } \
\text { (units) }
\end{array} & \begin{array} { c } 
\text { Marginal Cost } \
\text { (dollars) }
\end{array} \
\hline 1 & 2 \
2 & 3 \
3 & 4 \
4 & 5\\hline
\end{array}$$
-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 19

A new car has a sticker price of $35,000.Fred decided that he would pay no more than $32,000 for this car.He bought the car for $31,000.Fred obtained a consumer surplus of

Accepted Answer

A) $35,000. 
B) $32,000. 
C) $4,000. 
D) $3,000. 
E) $1,000. 
A) $35,000. 
B) $32,000. 
C) $4,000. 
D) $3,000. 
E) $1,000.

Question 20

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.

An oil painting has a marginal cost of $1,000.The painting was bought for $1,500.How much producer surplus did the painter obtain?

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.

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

Lotteries work best

When a deadweight loss occurs in a market,we can be certain that

Use the information below to answer the following question. Figure 5.2.3 -Sal likes to eat pizza.The ________ is the maximum amount that Sal is willing to pay for one more slice of pizza.

The essence of philosopher Robert Nozick's proposal is that

Use the figure below to answer the following questions. Figure 5.2.2 -Refer to Figure 5.2.2 If the price is P₁,consumer surplus is

An idea of fairness that emphasizes equality of opportunity is

A market supply curve is

Use the figure below to answer the following questions. Figure 5.2.2 -Refer to Figure 5.2.2.If the price rises from P₀ to P₁,the change in consumer surplus is

Consider the market for hot dogs.If this market becomes a monopoly,then there will be

Marginal cost

All of the following statements are true except ________.

As a method of resource allocation,force

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 -Refer to Table 5.2.1.If the price is $6 a unit,the producer surplus on the third unit is

A new car has a sticker price of $35,000.Fred decided that he would pay no more than $32,000 for this car.He bought the car for $31,000.Fred obtained a consumer surplus of

The symmetry principle is based on

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

An oil painting has a marginal cost of $1,000.The painting was bought for $1,500.How much producer surplus did the painter obtain?

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.

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

Lotteries work best

When a deadweight loss occurs in a market,we can be certain that

Use the information below to answer the following question. Figure 5.2.3 -Sal likes to eat pizza.The ________ is the maximum amount that Sal is willing to pay for one more slice of pizza.

The essence of philosopher Robert Nozick's proposal is that

Use the figure below to answer the following questions. Figure 5.2.2 -Refer to Figure 5.2.2 If the price is P1,consumer surplus is

An idea of fairness that emphasizes equality of opportunity is

A market supply curve is

Use the figure below to answer the following questions. Figure 5.2.2 -Refer to Figure 5.2.2.If the price rises from P0 to P1,the change in consumer surplus is

Consider the market for hot dogs.If this market becomes a monopoly,then there will be

Marginal cost

All of the following statements are true except ________.

As a method of resource allocation,force

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 -Refer to Table 5.2.1.If the price is $6 a unit,the producer surplus on the third unit is

A new car has a sticker price of $35,000.Fred decided that he would pay no more than $32,000 for this car.He bought the car for $31,000.Fred obtained a consumer surplus of

The symmetry principle is based on

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 questions. Figure 5.2.2 -Refer to Figure 5.2.2 If the price is P₁,consumer surplus is

Use the figure below to answer the following questions. Figure 5.2.2 -Refer to Figure 5.2.2.If the price rises from P₀ to P₁,the change in consumer surplus is