Question 1

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 2

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 100 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 3

Suppose the market for diamonds is a monopoly.We can expect

Accepted Answer

A) underproduction of diamonds. 
B) overproduction of diamonds. 
C) marginal social benefit to equal marginal social cost in the diamond market. 
D) an efficient quantity of diamonds. 
E) the allocation of diamonds to be first-come,first-served. 
A) underproduction of diamonds. 
B) overproduction of diamonds. 
C) marginal social benefit to equal marginal social cost in the diamond market. 
D) an efficient quantity of diamonds. 
E) the allocation of diamonds to be first-come,first-served.

Question 4

Use the figure below to answer the following questions.
   Figure 5.3.1
-Refer to Figure 5.3.1.If the quantity produced is 100,

Accepted Answer

A) marginal social benefit exceeds marginal social cost. 
B) marginal social cost exceeds marginal social benefit. 
C) production is efficient. 
D) marginal social benefit is minimized. 
E) deadweight loss is zero. 
A) marginal social benefit exceeds marginal social cost. 
B) marginal social cost exceeds marginal social benefit. 
C) production is efficient. 
D) marginal social benefit is minimized. 
E) deadweight loss is zero.

Question 5

Bill and Ted each consume 15 chocolate bars at the current price.If Bill's demand for chocolate bars is more elastic than Ted's demand,then

Accepted Answer

A) Bill's willingness to pay for the last chocolate bar is greater than Ted's. 
B) Ted's willingness to pay for the last chocolate bar is greater than Bill's. 
C) Bill's consumer surplus is greater than Ted's. 
D) Ted's consumer surplus is greater than Bill's. 
E) Bill's consumer surplus equals Ted's. 
A) Bill's willingness to pay for the last chocolate bar is greater than Ted's. 
B) Ted's willingness to pay for the last chocolate bar is greater than Bill's. 
C) Bill's consumer surplus is greater than Ted's. 
D) Ted's consumer surplus is greater than Bill's. 
E) Bill's consumer surplus equals Ted's.

Question 6

When a market price allocates a scarce resource

Accepted Answer

A) everyone in the economy can use the resource. 
B) only those who show interest can use the resource. 
C) willingness-to-pay is not an issue. 
D) ability to pay for the resource is less important than willingness-to-pay. 
E) only those who are willing and able to pay get the resource. 
A) everyone in the economy can use the resource. 
B) only those who show interest can use the resource. 
C) willingness-to-pay is not an issue. 
D) ability to pay for the resource is less important than willingness-to-pay. 
E) only those who are willing and able to pay get the resource.

Question 7

Use the figure below to answer the following questions.
   Figure 5.2.1
-Consider the demand curve in Figure 5.2.1.What is the value of the first unit of the good?

Accepted Answer

A) $10 
B) $9 
C) $8 
D) $5 
E) $4 
A) $10 
B) $9 
C) $8 
D) $5 
E) $4

Question 8

Except for the very last unit of a good sold,the price paid by consumers of that good for an additional unit is

Accepted Answer

A) less than the marginal social benefit from that unit. 
B) more than the marginal social benefit from that unit. 
C) less than the marginal social cost of producing that unit. 
D) less than the opportunity cost of producing that unit. 
E) equal to consumer surplus. 
A) less than the marginal social benefit from that unit. 
B) more than the marginal social benefit from that unit. 
C) less than the marginal social cost of producing that unit. 
D) less than the opportunity cost of producing that unit. 
E) equal to consumer surplus.

Question 9

If resources are allocated efficiently,

Accepted Answer

A) consumer surplus exceeds producer surplus. 
B) producer surplus exceeds consumer surplus. 
C) the sum of consumer surplus and producer surplus is maximized. 
D) marginal social benefit is maximized. 
E) marginal social cost is minimized. 
A) consumer surplus exceeds producer surplus. 
B) producer surplus exceeds consumer surplus. 
C) the sum of consumer surplus and producer surplus is maximized. 
D) marginal social benefit is maximized. 
E) marginal social cost is minimized.

Question 10

A supply curve is

Accepted Answer

A) the same as a production possibilities frontier. 
B) a marginal social benefit curve. 
C) a marginal benefit curve. 
D) a marginal cost curve. 
E) a downward-sloping curve. 
A) the same as a production possibilities frontier. 
B) a marginal social benefit curve. 
C) a marginal benefit curve. 
D) a marginal cost curve. 
E) a downward-sloping curve.

Question 11

Choose the correct statement.

Accepted Answer

A) The competitive market pushes the quantity produced to its efficient level. 
B) When the efficient quantity is produced in a competitive market,consumer surplus is maximized. 
C) Competitive equilibrium occurs when demand equals supply. 
D) When the efficient quantity is produced in a competitive market,producer surplus is maximized. 
E) When the efficient quantity is produced in a competitive market,producer surplus is minimized. 
A) The competitive market pushes the quantity produced to its efficient level. 
B) When the efficient quantity is produced in a competitive market,consumer surplus is maximized. 
C) Competitive equilibrium occurs when demand equals supply. 
D) When the efficient quantity is produced in a competitive market,producer surplus is maximized. 
E) When the efficient quantity is produced in a competitive market,producer surplus is minimized.

Question 12

If the owner of an apartment building rents only to married couples over the age of 30,the method of resource allocation is

Accepted Answer

A) majority rule. 
B) contest. 
C) personal characteristics. 
D) market price. 
E) force. 
A) majority rule. 
B) contest. 
C) personal characteristics. 
D) market price. 
E) force.

Question 13

Use the figure below to answer the following questions.
   Figure 5.2.2
-Refer to Figure 5.2.2.If the price is P0,then the value of the last unit consumed is

Accepted Answer

A) P0. 
B) P1. 
C) equal to area A + B + C. 
D) 0. 
E) P1- P0. 
A) P0. 
B) P1. 
C) equal to area A + B + C. 
D) 0. 
E) P1- P0.

Question 14

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 15

It is efficient to produce an additional shirt if the

Accepted Answer

A) marginal social benefit from producing the shirt exceeds zero. 
B) marginal social benefit of producing the shirt equals zero. 
C) consumer surplus from the additional shirt exceeds its producer surplus. 
D) marginal social benefit from producing the shirt is greater than the marginal social cost of producing it. 
E) producer surplus from the additional shirt exceeds its consumer surplus. 
A) marginal social benefit from producing the shirt exceeds zero. 
B) marginal social benefit of producing the shirt equals zero. 
C) consumer surplus from the additional shirt exceeds its producer surplus. 
D) marginal social benefit from producing the shirt is greater than the marginal social cost of producing it. 
E) producer surplus from the additional shirt exceeds its consumer surplus.

Question 16

Which of the following lead to an inefficient outcome? I.Decreasing marginal social benefit
II.Taxes
III.High transactions cost

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 17

What is the consumer surplus for the market from the production of the 100th unit of a good?

Accepted Answer

A) the marginal social cost of the 100th unit 
B) the marginal social benefit from the 100th unit 
C) the opportunity cost of producing the 100th unit 
D) the marginal social benefit from the 100th unit minus the marginal social cost of the 100th unit 
E) the marginal social benefit from the 100th unit minus the price paid for the 100th unit 
A) the marginal social cost of the 100th unit 
B) the marginal social benefit from the 100th unit 
C) the opportunity cost of producing the 100th unit 
D) the marginal social benefit from the 100th unit minus the marginal social cost of the 100th unit 
E) the marginal social benefit from the 100th unit minus the price paid for the 100th unit

Question 18

The two big approaches to thinking about fairness are ________.

Accepted Answer

A) it's not fair if my income is less than yours and it's not fair if my opportunities in life are less than yours 
B) it's not fair if the result isn't fair and it's not fair if the rules aren't fair 
C) the fairness of democracy and the fairness of central planning 
D) the fairness of income equality and the fairness of educational equality 
E) it's not fair if you are treated unkindly and it's not fair if you treat someone unkindly 
A) it's not fair if my income is less than yours and it's not fair if my opportunities in life are less than yours 
B) it's not fair if the result isn't fair and it's not fair if the rules aren't fair 
C) the fairness of democracy and the fairness of central planning 
D) the fairness of income equality and the fairness of educational equality 
E) it's not fair if you are treated unkindly and it's not fair if you treat someone unkindly

Question 19

The marginal cost of producing one more hot dog is $1.00.The price of a hot dog is $1.50.The producer surplus from selling one more hotdog is

Accepted Answer

A) $1.00. 
B) $1.50. 
C) $0.50. 
D) zero. 
E) $2.50. 
A) $1.00. 
B) $1.50. 
C) $0.50. 
D) zero. 
E) $2.50.

Question 20

What method of resource allocation depends on willingness-to-pay and ability-to-pay?

Accepted Answer

A) command 
B) lottery 
C) market price 
D) first-come,first-served 
E) force 
A) command 
B) lottery 
C) market price 
D) first-come,first-served 
E) force

Majority rule allocates resources in the way that

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 100 units,the deadweight loss is area

Suppose the market for diamonds is a monopoly.We can expect

Use the figure below to answer the following questions. Figure 5.3.1 -Refer to Figure 5.3.1.If the quantity produced is 100,

Bill and Ted each consume 15 chocolate bars at the current price.If Bill's demand for chocolate bars is more elastic than Ted's demand,then

When a market price allocates a scarce resource

Use the figure below to answer the following questions. Figure 5.2.1 -Consider the demand curve in Figure 5.2.1.What is the value of the first unit of the good?

Except for the very last unit of a good sold,the price paid by consumers of that good for an additional unit is

If resources are allocated efficiently,

A supply curve is

Choose the correct statement.

If the owner of an apartment building rents only to married couples over the age of 30,the method of resource allocation is

Use the figure below to answer the following questions. Figure 5.2.2 -Refer to Figure 5.2.2.If the price is P₀,then the value of the last unit consumed is

Contests do a good job in resource allocation

It is efficient to produce an additional shirt if the

Which of the following lead to an inefficient outcome? I.Decreasing marginal social benefit II.Taxes III.High transactions cost

What is the consumer surplus for the market from the production of the 100th unit of a good?

The two big approaches to thinking about fairness are ________.

The marginal cost of producing one more hot dog is $1.00.The price of a hot dog is $1.50.The producer surplus from selling one more hotdog is

What method of resource allocation depends on willingness-to-pay and ability-to-pay?

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

Majority rule allocates resources in the way that

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 100 units,the deadweight loss is area

Suppose the market for diamonds is a monopoly.We can expect

Use the figure below to answer the following questions. Figure 5.3.1 -Refer to Figure 5.3.1.If the quantity produced is 100,

Bill and Ted each consume 15 chocolate bars at the current price.If Bill's demand for chocolate bars is more elastic than Ted's demand,then

When a market price allocates a scarce resource

Use the figure below to answer the following questions. Figure 5.2.1 -Consider the demand curve in Figure 5.2.1.What is the value of the first unit of the good?

Except for the very last unit of a good sold,the price paid by consumers of that good for an additional unit is

If resources are allocated efficiently,

A supply curve is

Choose the correct statement.

If the owner of an apartment building rents only to married couples over the age of 30,the method of resource allocation is

Use the figure below to answer the following questions. Figure 5.2.2 -Refer to Figure 5.2.2.If the price is P0,then the value of the last unit consumed is

Contests do a good job in resource allocation

It is efficient to produce an additional shirt if the

Which of the following lead to an inefficient outcome? I.Decreasing marginal social benefit II.Taxes III.High transactions cost

What is the consumer surplus for the market from the production of the 100th unit of a good?

The two big approaches to thinking about fairness are ________.

The marginal cost of producing one more hot dog is $1.00.The price of a hot dog is $1.50.The producer surplus from selling one more hotdog is

What method of resource allocation depends on willingness-to-pay and ability-to-pay?

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 P₀,then the value of the last unit consumed is