Question 1

The Case in Point on Saving the Elephant suggests that:

Accepted Answer

A) elephants in many parts of Central Africa are a common property resource. 
B) common property resources are often used or exploited beyond the efficient level. 
C) granting villagers exclusive and transferable property rights to elephants may be an effective tool in reducing the extent of poaching and illegal hunting of elephants. 
D) all of the above are true. 
A) elephants in many parts of Central Africa are a common property resource. 
B) common property resources are often used or exploited beyond the efficient level. 
C) granting villagers exclusive and transferable property rights to elephants may be an effective tool in reducing the extent of poaching and illegal hunting of elephants. 
D) all of the above are true.

Question 2

An example of a resource for which no property rights exist is a:

Accepted Answer

A) cow. 
B) whale. 
C) chicken. 
D) goldfish. 
A) cow. 
B) whale. 
C) chicken. 
D) goldfish.

Question 3

The tendency of people or firms to consume a public good without paying for it is the ________ problem.

Accepted Answer

A) free-cost 
B) free-rider 
C) free-goods 
D) free-market 
A) free-cost 
B) free-rider 
C) free-goods 
D) free-market

Question 4

Public goods are not sold in efficient quantities in the marketplace because:

Accepted Answer

A) once supplied to a buyer, they are made available at no cost to someone else. 
B) the more one person has, the less another person has. 
C) they are usually so costly that only the wealthy can afford them. 
D) of none of the above. 
A) once supplied to a buyer, they are made available at no cost to someone else. 
B) the more one person has, the less another person has. 
C) they are usually so costly that only the wealthy can afford them. 
D) of none of the above.

Question 5

-(Exhibit: Net Benefit)Net benefit is the area:

Accepted Answer

A) ACD. 
B) ABDE. 
C) BCD. 
D) OBDE. 
A) ACD. 
B) ABDE. 
C) BCD. 
D) OBDE.

Question 6

-(Exhibit: Markets and Efficiency)Refer to Panel (c).Suppose the costs to apple producers rise.This will:

Accepted Answer

A) increase the marginal cost of producing apples. 
B) increase the supply of apples. 
C) cause the price of apples to fall. 
D) result in A and C. 
A) increase the marginal cost of producing apples. 
B) increase the supply of apples. 
C) cause the price of apples to fall. 
D) result in A and C.

Question 7

A public good is one for which the cost of exclusion is prohibitive and for which the marginal cost of provision to another consumer is zero.

Accepted Answer

A) True 
 B)False

Question 8

An inefficient allocation of resources will occur when:

Accepted Answer

A) decisionmakers are faced with the costs and benefits of their actions. 
B) there are clearly defined property rights. 
C) no alternative exists that would increase the welfare of society. 
D) decisionmakers are not faced with the benefits and costs of their choices. 
A) decisionmakers are faced with the costs and benefits of their actions. 
B) there are clearly defined property rights. 
C) no alternative exists that would increase the welfare of society. 
D) decisionmakers are not faced with the benefits and costs of their choices.

Question 9

A private good is a good or service for which exclusion:

Accepted Answer

A) is possible and for which marginal cost of an additional user is zero. 
B) is possible and for which marginal cost of an additional user is positive. 
C) cannot be applied and for which marginal cost of an additional user is zero. 
D) cannot be applied and for which marginal cost of an additional user is positive. 
A) is possible and for which marginal cost of an additional user is zero. 
B) is possible and for which marginal cost of an additional user is positive. 
C) cannot be applied and for which marginal cost of an additional user is zero. 
D) cannot be applied and for which marginal cost of an additional user is positive.

Question 10

An external cost would cause _______ production of the good and may require a _______ to internalize the externality into the market.

Accepted Answer

A) too much; tax 
B) too much; subsidy 
C) too little; tax 
D) too little; subsidy 
A) too much; tax 
B) too much; subsidy 
C) too little; tax 
D) too little; subsidy

Question 11

When we judge the performance of the economy, we must consider:

Accepted Answer

A) efficiency. 
B) external costs and external benefits. 
C) equity and value judgments. 
D) all of the above. 
A) efficiency. 
B) external costs and external benefits. 
C) equity and value judgments. 
D) all of the above.

Question 12

-(Exhibit: Markets and Efficiency)In Panel (b)demand shifted from D1 to D2, reflecting a change in consumer preferences.As the price changes to the new equilibrium price, some producers will:

Accepted Answer

A) find that their marginal benefit of producing apples is below their marginal cost. 
B) cut back on apple production. 
C) respond to the signal sent by consumers and start to produce other goods that are more valuable than apples. 
D) do all of the above. 
A) find that their marginal benefit of producing apples is below their marginal cost. 
B) cut back on apple production. 
C) respond to the signal sent by consumers and start to produce other goods that are more valuable than apples. 
D) do all of the above.

Question 13

-(Exhibit: Net Benefit)The equilibrium price will be _______ and the equilibrium quantity will be ________.

Accepted Answer

A) OI; OH 
B) OA: OH 
C) OB; OE 
D) OI; OE 
A) OI; OH 
B) OA: OH 
C) OB; OE 
D) OI; OE

Question 14

-When price signals reflect _______ benefits and _______ costs of choices, we expect that the allocation of resources will be _______ .

Accepted Answer

A) average; average; efficient 
B) marginal; marginal; inefficient 
C) marginal; average; efficient 
D) marginal; marginal; efficient 
A) average; average; efficient 
B) marginal; marginal; inefficient 
C) marginal; average; efficient 
D) marginal; marginal; efficient

Question 15

-(Exhibit: Measuring Consumer Surplus)If pizzas are $6 each, your consumer surplus is:

Accepted Answer

A) $24. 
B) $16. 
C) $8. 
D) $4. 
A) $24. 
B) $16. 
C) $8. 
D) $4.

Question 16

-(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.At 4 hours of study the student will "maximize" because:

Accepted Answer

A) MB = MC. 
B) MB = 20 and MC = 20. 
C) the difference between total benefits and total costs is maximized. 
D) of all of the above. 
A) MB = MC. 
B) MB = 20 and MC = 20. 
C) the difference between total benefits and total costs is maximized. 
D) of all of the above.

Question 17

In our society, a good for which exclusion is possible is:

Accepted Answer

A) infectious disease control. 
B) courts of law. 
C) naval defense. 
D) municipal swimming pools. 
A) infectious disease control. 
B) courts of law. 
C) naval defense. 
D) municipal swimming pools.

Question 18

-(Exhibit: Markets and Efficiency)In Panel (b)demand shifted from D1 to D2, reflecting a change in consumer preferences.The price of apples will change to the new equilibrium price:

Accepted Answer

A) where the marginal benefit of apples is again equal to the marginal cost. 
B) of $0.70. 
C) where an efficient solution is again achieved. 
D) that is described by all of the above. 
A) where the marginal benefit of apples is again equal to the marginal cost. 
B) of $0.70. 
C) where an efficient solution is again achieved. 
D) that is described by all of the above.

Question 19

-(Exhibit: Market Failure 1)If the market produces quantity F, 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 20

Net benefit can be maximized by finding the greatest difference between:

Accepted Answer

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

Exam 6: Measuring Total Output and Income

The Case in Point on Saving the Elephant suggests that:

An example of a resource for which no property rights exist is a:

The tendency of people or firms to consume a public good without paying for it is the ________ problem.

Public goods are not sold in efficient quantities in the marketplace because:

-(Exhibit: Net Benefit)Net benefit is the area:

-(Exhibit: Markets and Efficiency)Refer to Panel (c).Suppose the costs to apple producers rise.This will:

A public good is one for which the cost of exclusion is prohibitive and for which the marginal cost of provision to another consumer is zero.

An inefficient allocation of resources will occur when:

A private good is a good or service for which exclusion:

An external cost would cause _______ production of the good and may require a _______ to internalize the externality into the market.

When we judge the performance of the economy, we must consider:

-(Exhibit: Markets and Efficiency)In Panel (b)demand shifted from D1 to D2, reflecting a change in consumer preferences.As the price changes to the new equilibrium price, some producers will:

-(Exhibit: Net Benefit)The equilibrium price will be _______ and the equilibrium quantity will be ________.

-When price signals reflect _______ benefits and _______ costs of choices, we expect that the allocation of resources will be _______ .

-(Exhibit: Measuring Consumer Surplus)If pizzas are $6 each, your consumer surplus is:

-(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.At 4 hours of study the student will "maximize" because:

In our society, a good for which exclusion is possible is:

-(Exhibit: Markets and Efficiency)In Panel (b)demand shifted from D1 to D2, reflecting a change in consumer preferences.The price of apples will change to the new equilibrium price:

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

Net benefit can be maximized by finding the greatest difference between:

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

An external cost would cause _ production of the good and may require a _ to internalize the externality into the market.

-(Exhibit: Markets and Efficiency)In Panel (b)demand shifted from D₁ to D₂, reflecting a change in consumer preferences.As the price changes to the new equilibrium price, some producers will:

-(Exhibit: Net Benefit)The equilibrium price will be _ and the equilibrium quantity will be __.

-When price signals reflect ___ benefits and _ costs of choices, we expect that the allocation of resources will be _____ .

-(Exhibit: Markets and Efficiency)In Panel (b)demand shifted from D₁ to D₂, reflecting a change in consumer preferences.The price of apples will change to the new equilibrium price: