Question 1

-(Exhibit: Markets and Efficiency)Using Panel (a), which of the following statements is (are)true?

Accepted Answer

A) Consumers face a price that bears no relation to marginal cost. 
B) Consumers face a price of apples that signals their marginal cost. 
C) Consumers will buy apples as long as their marginal cost exceeds their marginal benefits. 
D) All of the above statements are true. 
A) Consumers face a price that bears no relation to marginal cost. 
B) Consumers face a price of apples that signals their marginal cost. 
C) Consumers will buy apples as long as their marginal cost exceeds their marginal benefits. 
D) All of the above statements are true.

Question 2

The satisfaction consumers derive from their consumption of goods and services is:

Accepted Answer

A) utility. 
B) production. 
C) efficiency. 
D) profit. 
A) utility. 
B) production. 
C) efficiency. 
D) profit.

Question 3

According to the authors of your text, whatever distribution of income society chooses, an ________ allocation of resources is preferred to an _______ one.

Accepted Answer

A) inefficient; efficient 
B) efficient; equitable 
C) equitable; efficient 
D) efficient; inefficient 
A) inefficient; efficient 
B) efficient; equitable 
C) equitable; efficient 
D) efficient; inefficient

Question 4

Economists assume that consumers seek to maximize:

Accepted Answer

A) usefulness. 
B) profit. 
C) utility. 
D) time. 
A) usefulness. 
B) profit. 
C) utility. 
D) time.

Question 5

Common property resources tend to be _______ through markets.

Accepted Answer

A) overpriced 
B) efficiently priced 
C) overconsumed 
D) underconsumed 
A) overpriced 
B) efficiently priced 
C) overconsumed 
D) underconsumed

Question 6

There is/are _______ that economists can apply to determine whether the distribution of income is equitable or inequitable.

Accepted Answer

A) several tests 
B) no test 
C) a specific social measurement test 
D) positive tests 
A) several tests 
B) no test 
C) a specific social measurement test 
D) positive tests

Question 7

The best example of a common property resource is:

Accepted Answer

A) the electromagnetic spectrum. 
B) transportation. 
C) automobiles. 
D) clothing. 
A) the electromagnetic spectrum. 
B) transportation. 
C) automobiles. 
D) clothing.

Question 8

The Demand for Golf Balls
 $$\begin{array} { c c } 
\begin{array} { c } 
\text { Demand Price } \
\text { (per dozen) }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { (dozen) }
\end{array} \
\hline 20 & 0 \
18 & 1 \
16 & 2 \
14 & 3 \
12 & 4 \
10 & 5
\end{array}$$
-(Exhibit: The Demand for Golf Balls)Assume that 3 dozen golf balls are purchased for $14 per dozen.Consumer surplus is:

Accepted Answer

A) $1. 
B) $4. 
C) $9. 
D) $16. 
A) $1. 
B) $4. 
C) $9. 
D) $16.

Question 9

When public goods are provided by private firms, with no government involvement, we expect that:

Accepted Answer

A) the equilibrium quantity will be less than would be efficient. 
B) the equilibrium quantity will be greater than would be efficient. 
C) the equilibrium quantity will be the efficient quantity. 
D) their profits will be excessive. 
A) the equilibrium quantity will be less than would be efficient. 
B) the equilibrium quantity will be greater than would be efficient. 
C) the equilibrium quantity will be the efficient quantity. 
D) their profits will be excessive.

Question 10

-(Exhibit: Surplus and Demand)The amount by which the total benefits to consumers exceeds their total expenditure is called _______ and is depicted at quantity OE by the area _______ .

Accepted Answer

A) producer surplus; BCD 
B) consumer surplus; OCDE 
C) consumer surplus; BCD 
D) net benefit; OBDE 
A) producer surplus; BCD 
B) consumer surplus; OCDE 
C) consumer surplus; BCD 
D) net benefit; OBDE

Question 11

-(Exhibit: Marginal Benefit, Marginal Cost, and Net Benefit)In Panel (a), the maximum net benefit is shown:

Accepted Answer

A) where the level of activity is at D. 
B) by the intersection of MB and MC. 
C) by the area of triangle ABC. 
D) in all of the above cases. 
A) where the level of activity is at D. 
B) by the intersection of MB and MC. 
C) by the area of triangle ABC. 
D) in all of the above cases.

Question 12

The efficiency condition requires:

Accepted Answer

A) marginal costs be generally less than marginal benefits. 
B) prices in the marketplace confront decision makers with the marginal benefits and marginal costs of their decisions. 
C) more goods be produced than exchanged. 
D) more goods be exchanged than produced. 
A) marginal costs be generally less than marginal benefits. 
B) prices in the marketplace confront decision makers with the marginal benefits and marginal costs of their decisions. 
C) more goods be produced than exchanged. 
D) more goods be exchanged than produced.

Question 13

-(Exhibit: Model of a Competitive Market)If there are external costs, a tax imposed on sellers will:

Accepted Answer

A) decrease the equilibrium quantity. 
B) increase the equilibrium quantity. 
C) have no effect on the equilibrium price. 
D) decrease the equilibrium price. 
A) decrease the equilibrium quantity. 
B) increase the equilibrium quantity. 
C) have no effect on the equilibrium price. 
D) decrease the equilibrium price.

Question 14

-(Exhibit: Surplus and Supply)The supply curve in the exhibit can be considered to be a ________ curve.

Accepted Answer

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

Question 15

In economics the assumption is made that consumers and firms will make choices that maximize(s)the _______ of each activity.

Accepted Answer

A) net benefit 
B) total benefit 
C) sum of total benefit and total cost 
D) product of total benefit and total cost 
A) net benefit 
B) total benefit 
C) sum of total benefit and total cost 
D) product of total benefit and total cost

Question 16

The best example of a common property resource is:

Accepted Answer

A) clothing. 
B) education. 
C) automobiles. 
D) tuna in the ocean. 
A) clothing. 
B) education. 
C) automobiles. 
D) tuna in the ocean.

Question 17

External costs may require government intervention.

Accepted Answer

A) True 
 B)False

Question 18

-(Exhibit: Model of a Competitive Market)If there are external costs:

Accepted Answer

A) resources will be underallocated to the production of the good. 
B) resources will be overallocated to the production of the good. 
C) resources will be allocated efficiently to the production of the good. 
D) the price at P will be higher than if there were no external costs. 
A) resources will be underallocated to the production of the good. 
B) resources will be overallocated to the production of the good. 
C) resources will be allocated efficiently to the production of the good. 
D) the price at P will be higher than if there were no external costs.

Question 19

A good for which no exclusive property rights exist is a:

Accepted Answer

A) common property resource. 
B) private good. 
C) private resource. 
D) social-private good. 
A) common property resource. 
B) private good. 
C) private resource. 
D) social-private good.

Question 20

If the price of popcorn is $0.50 per box and the price of peanuts is $0.25 per bag, and you have $10 to spend on both goods, the maximum quantity of popcorn that you can purchase is _______ boxes.

Accepted Answer

A) 5 
B) 10 
C) 20 
D) 40 
A) 5 
B) 10 
C) 20 
D) 40

Exam 6: Measuring Total Output and Income

-(Exhibit: Markets and Efficiency)Using Panel (a), which of the following statements is (are)true?

The satisfaction consumers derive from their consumption of goods and services is:

According to the authors of your text, whatever distribution of income society chooses, an ________ allocation of resources is preferred to an _______ one.

Economists assume that consumers seek to maximize:

Common property resources tend to be _______ through markets.

There is/are _______ that economists can apply to determine whether the distribution of income is equitable or inequitable.

The best example of a common property resource is:

The Demand for Golf Balls Demand Price (per dozen) Quantity (dozen) 20 0 18 1 16 2 14 3 12 4 10 5 -(Exhibit: The Demand for Golf Balls)Assume that 3 dozen golf balls are purchased for $14 per dozen.Consumer surplus is:

When public goods are provided by private firms, with no government involvement, we expect that:

-(Exhibit: Surplus and Demand)The amount by which the total benefits to consumers exceeds their total expenditure is called _______ and is depicted at quantity OE by the area _______ .

-(Exhibit: Marginal Benefit, Marginal Cost, and Net Benefit)In Panel (a), the maximum net benefit is shown:

The efficiency condition requires:

-(Exhibit: Model of a Competitive Market)If there are external costs, a tax imposed on sellers will:

-(Exhibit: Surplus and Supply)The supply curve in the exhibit can be considered to be a ________ curve.

In economics the assumption is made that consumers and firms will make choices that maximize(s)the _______ of each activity.

The best example of a common property resource is:

External costs may require government intervention.

-(Exhibit: Model of a Competitive Market)If there are external costs:

A good for which no exclusive property rights exist is a:

If the price of popcorn is $0.50 per box and the price of peanuts is $0.25 per bag, and you have $10 to spend on both goods, the maximum quantity of popcorn that you can purchase is _______ boxes.

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

According to the authors of your text, whatever distribution of income society chooses, an __ allocation of resources is preferred to an _ one.

-(Exhibit: Surplus and Demand)The amount by which the total benefits to consumers exceeds their total expenditure is called _ and is depicted at quantity OE by the area _ .