Question 1

Whenever MB > MC, the decisionmaker should do _______ of the activity.

Accepted Answer

A) less 
B) the same amount 
C) more 
D) none 
A) less 
B) the same amount 
C) more 
D) none

Question 2

An efficient allocation of resources is also an equitable allocation of resources.

Accepted Answer

A) True 
 B)False

Question 3

-(Exhibit: Surplus and Demand)The total benefit of consuming OE units is given by the area:

Accepted Answer

A) OCDE. 
B) OBDE. 
C) BCD. 
D) OEDB. 
A) OCDE. 
B) OBDE. 
C) BCD. 
D) OEDB.

Question 4

If the marginal benefit received from a good is less than the marginal cost of production, then:

Accepted Answer

A) society's well-being can be improved if production increases. 
B) society's well-being can be improved if production decreases. 
C) society's well-being cannot be improved by changing production. 
D) the market is producing too little of the good. 
A) society's well-being can be improved if production increases. 
B) society's well-being can be improved if production decreases. 
C) society's well-being cannot be improved by changing production. 
D) the market is producing too little of the good.

Question 5

Market efficiency requires that property rights be exclusive and transferable.

Accepted Answer

A) True 
 B)False

Question 6

A transferable property right is one that:

Accepted Answer

A) can be sold or leased to someone else. 
B) allows its owners to prevent others from using a resource. 
C) equates marginal benefits to marginal costs. 
D) lets anyone use a resource without cost to society. 
A) can be sold or leased to someone else. 
B) allows its owners to prevent others from using a resource. 
C) equates marginal benefits to marginal costs. 
D) lets anyone use a resource without cost to society.

Question 7

Suppose that the expected exam scores from studying economics for 0, 1, 2, or 3 hours are 65, 80, 90, and 95 points, respectively, while the expected exam scores for studying 0, 1, 2, or 3 hours of accounting are 50, 65, 70, and 70 points, respectively.With 3 total hours of study time, your combined scores can be maximized by spending _______ hours studying accounting.

Accepted Answer

A) 0 
B) 1 
C) 2 
D) 3 
A) 0 
B) 1 
C) 2 
D) 3

Question 8

-(Exhibit: Marginal Benefits and Marginal Costs)In the exhibit, more time spent studying economics adds points to economics scores but subtracts points from accounting scores.When the student studies economics for 4 hours, the marginal benefit is _______ ;when the student studies for 6 hours, the marginal benefit is _______ .

Accepted Answer

A) 20; 10 
B) 30; 10 
C) 20; 0 
D) 20; 30 
A) 20; 10 
B) 30; 10 
C) 20; 0 
D) 20; 30

Question 9

To be effective in facilitating exchange, property rights must be:

Accepted Answer

A) exclusive. 
B) nontransferable. 
C) nonexclusive. 
D) defined to give complete freedom to the owner to use the property in any way the owner chooses. 
A) exclusive. 
B) nontransferable. 
C) nonexclusive. 
D) defined to give complete freedom to the owner to use the property in any way the owner chooses.

Question 10

Market power exerted by either buyers or sellers is an example of:

Accepted Answer

A) competitive markets. 
B) the efficient condition. 
C) market failure. 
D) nonmaximizing behavior. 
A) competitive markets. 
B) the efficient condition. 
C) market failure. 
D) nonmaximizing behavior.

Question 11

An example of a public good is:

Accepted Answer

A) courts of law. 
B) clothing. 
C) food. 
D) state universities. 
A) courts of law. 
B) clothing. 
C) food. 
D) state universities.

Question 12

-(Exhibit: Surplus and Demand)The market demand curve can be considered to be a _______ curve.

Accepted Answer

A) marginal benefit 
B) marginal cost 
C) total benefit 
D) total cost 
A) marginal benefit 
B) marginal cost 
C) total benefit 
D) total cost

Question 13

-(Exhibit: Markets and Efficiency)In Panel (b)demand shifted from D1 to D2 reflecting a change in consumer preferences.Based upon that, which of the following statements is true?

Accepted Answer

A) At the price of $.80, the quantity of apples demanded will now be greater than the quantity supplied. 
B) At the price of $.80, the quantity supplied of apples will now equal the quantity demanded. 
C) There is pressure for the price of apples to fall to $0.70 per pound. 
D) A shortage of apples will force the price up to the new price of $0.90. 
A) At the price of $.80, the quantity of apples demanded will now be greater than the quantity supplied. 
B) At the price of $.80, the quantity supplied of apples will now equal the quantity demanded. 
C) There is pressure for the price of apples to fall to $0.70 per pound. 
D) A shortage of apples will force the price up to the new price of $0.90.

Question 14

-(Exhibit: Measuring Consumer Surplus)If pizzas were free, your consumer surplus would be:

Accepted Answer

A) $100. 
B) $50. 
C) $10. 
D) $1. 
A) $100. 
B) $50. 
C) $10. 
D) $1.

Question 15

-(Exhibit: Market Failure 1)If the market produces quantity E, then:

Accepted Answer

A) marginal benefit is equal to marginal cost. 
B) marginal benefit is less than marginal cost. 
C) marginal benefit is greater than marginal cost. 
D) price is equal to marginal cost and greater than marginal benefit. 
A) marginal benefit is equal to marginal cost. 
B) marginal benefit is less than marginal cost. 
C) marginal benefit is greater than marginal cost. 
D) price is equal to marginal cost and greater than marginal benefit.

Question 16

Whenever a species is threatened with extinction, it is likely that:

Accepted Answer

A) clearly defined property rights exist. 
B) no one has exclusive property rights to it. 
C) greedy folks are winning again. 
D) it is the result of too much government regulation. 
A) clearly defined property rights exist. 
B) no one has exclusive property rights to it. 
C) greedy folks are winning again. 
D) it is the result of too much government regulation.

Question 17

Suppose that the expected exam scores from studying economics for 0, 1, 2, or 3 hours are 65, 80, 90, and 95 points, respectively, while the expected exam scores for studying 0, 1, 2, or 3 hours of accounting are 50, 65, 70, and 70 points, respectively.With 3 total hours of study time, the marginal benefit in terms of your economics score of spending the first hour studying economics is _______ points.

Accepted Answer

A) 5 
B) 10 
C) 15 
D) 20 
A) 5 
B) 10 
C) 15 
D) 20

Question 18

According to the Case in Point on Saving the Elephant, granting exclusive and transferable property rights in elephants to the villagers of Botswana, Zimbabwe, and Namibia in southern Africa:

Accepted Answer

A) led to exclusive and transferable hunting licenses, which allowed a few hunters to kill some elephants. 
B) may have been responsible for the over hunting of elephants in those countries. 
C) resulted in extinction of elephants in those countries. 
D) all of the above are true. 
A) led to exclusive and transferable hunting licenses, which allowed a few hunters to kill some elephants. 
B) may have been responsible for the over hunting of elephants in those countries. 
C) resulted in extinction of elephants in those countries. 
D) all of the above are true.

Question 19

To be effective in facilitating exchange, property rights must be:

Accepted Answer

A) nonexclusive. 
B) transferable. 
C) free. 
D) owned by everyone. 
A) nonexclusive. 
B) transferable. 
C) free. 
D) owned by everyone.

Question 20

Economists assume that firms seek to maximize:

Accepted Answer

A) sales. 
B) profits. 
C) costs. 
D) all of the above. 
A) sales. 
B) profits. 
C) costs. 
D) all of the above.

Exam 6: Measuring Total Output and Income

Whenever MB > MC, the decisionmaker should do _______ of the activity.

An efficient allocation of resources is also an equitable allocation of resources.

-(Exhibit: Surplus and Demand)The total benefit of consuming OE units is given by the area:

If the marginal benefit received from a good is less than the marginal cost of production, then:

Market efficiency requires that property rights be exclusive and transferable.

A transferable property right is one that:

To be effective in facilitating exchange, property rights must be:

Market power exerted by either buyers or sellers is an example of:

An example of a public good is:

-(Exhibit: Surplus and Demand)The market demand curve can be considered to be a _______ curve.

-(Exhibit: Markets and Efficiency)In Panel (b)demand shifted from D1 to D2 reflecting a change in consumer preferences.Based upon that, which of the following statements is true?

-(Exhibit: Measuring Consumer Surplus)If pizzas were free, your consumer surplus would be:

-(Exhibit: Market Failure 1)If the market produces quantity E, then:

Whenever a species is threatened with extinction, it is likely that:

According to the Case in Point on Saving the Elephant, granting exclusive and transferable property rights in elephants to the villagers of Botswana, Zimbabwe, and Namibia in southern Africa:

To be effective in facilitating exchange, property rights must be:

Economists assume that firms seek to maximize:

Economics: the Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Demand and Supply

Macroeconomics: the Big Picture

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Inflation and Unemployment

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Macroeconomics: the Big Picture

Measuring Total Income and Output

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Macro Inflation and Unemployment

Macro a Brief History of Macroeconomic Thought and Policy

Economic Development

Socialist Economies in Transition

Filters

-(Exhibit: Markets and Efficiency)In Panel (b)demand shifted from D₁ to D₂ reflecting a change in consumer preferences.Based upon that, which of the following statements is true?