Question 1

-(Exhibit: Markets and Efficiency)What is the marginal cost of an extra pound of apples to a producer in Panel(a)?

Accepted Answer

A) It is the value that must be given up to produce an extra pound of apples. 
B) It is greater than the price. 
C) It must be less than the price. 
D) It is the cost of the least satisfactory apples. 
A) It is the value that must be given up to produce an extra pound of apples. 
B) It is greater than the price. 
C) It must be less than the price. 
D) It is the cost of the least satisfactory apples.

Question 2

-(Exhibit: Market Failure 1)If the market produces quantity G, 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 less 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 less than marginal benefit.

Question 3

Private firms would be unlikely to attempt to produce the service of fending off incoming asteroids because:

Accepted Answer

A) it would be expensive. 
B) no one cares about asteroids. 
C) such a service would be a public good. 
D) asteroids are protected by international law. 
A) it would be expensive. 
B) no one cares about asteroids. 
C) such a service would be a public good. 
D) asteroids are protected by international law.

Question 4

An industry with external costs produces:

Accepted Answer

A) a quantity of output that is the socially ideal quantity. 
B) a smaller quantity of output than the socially ideal quantity. 
C) a larger quantity of output than the socially ideal quantity. 
D) the socially ideal quantity of output if a specific subsidy is given to buyers. 
A) a quantity of output that is the socially ideal quantity. 
B) a smaller quantity of output than the socially ideal quantity. 
C) a larger quantity of output than the socially ideal quantity. 
D) the socially ideal quantity of output if a specific subsidy is given to buyers.

Question 5

-(Exhibit: Markets and Efficiency)In panel (a):

Accepted Answer

A) the price of apples is $0.80 and the quantity demanded is Q1. 
B) the equilibrium price ensures that quantity demanded will match quantity supplied. 
C) the equilibrium price ensures that there will be neither surpluses nor shortages. 
D) all of the above are true. 
A) the price of apples is $0.80 and the quantity demanded is Q1. 
B) the equilibrium price ensures that quantity demanded will match quantity supplied. 
C) the equilibrium price ensures that there will be neither surpluses nor shortages. 
D) all of the above are true.

Question 6

When the net benefits of all economic activities are not maximized, economists say the allocation of resources is _______ .

Accepted Answer

A) inefficient 
B) incorrect 
C) efficient 
D) poorly done 
A) inefficient 
B) incorrect 
C) efficient 
D) poorly done

Question 7

A copper mining operation discharges waste products into a river and causes higher costs and discomfort to downstream users of the water.In this case:

Accepted Answer

A) too few of society's resources are being used to produce copper. 
B) too many of society's resources are being used to produce copper. 
C) the ideal amount of society's resources are being used to produce copper. 
D) there is an external benefit to society from copper production. 
A) too few of society's resources are being used to produce copper. 
B) too many of society's resources are being used to produce copper. 
C) the ideal amount of society's resources are being used to produce copper. 
D) there is an external benefit to society from copper production.

Question 8

The Case in Point on Externalities, Cigarettes, and Smoking suggests that smokers generate:

Accepted Answer

A) external benefits to society by dying early, thereby subsidizing the retirement costs of the rest of the population. 
B) external costs to society by dying early, thereby subsidizing the retirement costs of the rest of the population. 
C) net costs to society. 
D) external costs that are greater than the external benefits they generate. 
A) external benefits to society by dying early, thereby subsidizing the retirement costs of the rest of the population. 
B) external costs to society by dying early, thereby subsidizing the retirement costs of the rest of the population. 
C) net costs to society. 
D) external costs that are greater than the external benefits they generate.

Exam 6: Measuring Total Output and Income

-(Exhibit: Markets and Efficiency)What is the marginal cost of an extra pound of apples to a producer in Panel(a)?

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

Private firms would be unlikely to attempt to produce the service of fending off incoming asteroids because:

An industry with external costs produces:

-(Exhibit: Markets and Efficiency)In panel (a):

When the net benefits of all economic activities are not maximized, economists say the allocation of resources is _______ .

A copper mining operation discharges waste products into a river and causes higher costs and discomfort to downstream users of the water.In this case:

The Case in Point on Externalities, Cigarettes, and Smoking suggests that smokers generate:

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

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