Exam 5: Efficiency and Equity

If resources are used efficiently, then

-The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. What is the marginal social cost to the economy of Kaffenia of producing the 300th dozen doughnuts each day?

Underproduction compared to the efficient amount implies that for the last unit produced

-The figure above shows the market for milk. If 100 gallons of milk a day are available, the ________ price that consumers are willing to pay for the last gallon is ________.

At the current level of output, the marginal social benefit of pizza exceeds the marginal social cost of pizza. Compared to the allocatively efficient quantity, we are producing too ________ pizza and too ________ of other goods.

-The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. What is the efficient quantity of chocolate to produce each day?

-In the above figure, suppose the quantity produced is 40. Then

-In the above figure, a price of $1.25 and a quantity of 5 million gallons of milk per day maximizes the

-In the above figure, if the price is $1.25 per gallon of milk and 5 million gallons are produced and consumed, then the consumer surplus is ________ and the producer surplus is ________.

At the beginning of World War II, a rationing system was established in the United States. Ration stamps or cards were issued for a variety of commodities such as canned milk and gasoline. Canned milk was only available to babies and small children. In this example, canned milk was allocated through

If there is an external cost from making paper, an unregulated competitive market produces

Deadweight loss is

The Wii was a wildly popular home video game console released by Nintendo. The Wii system was first available in the United States in November, 2006 and sold more than 30 million units as of August 2010. The Wii retails for $199. Suppose Ahmed was willing to pay $230, Lana is willing to pay $175, and Bodie is willing to pay $300 for a Wii. Who will purchase a Wii?

The minimum supply-price is the same as

-The figure above shows the market for coffee. The ________ price that producers must be offered to get them to produce 30 million pounds of coffee per month is ________.

Meat at the supermarket has contributed to increase in food prices in 2010, and high feed and fuel prices mean that steak will likely cost a lot more this fall. The price of feed has increased 50 percent and hay has doubled from two years ago. Based on this information, which of the following is NOT true in the market for beef?

-The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. When the marginal social benefit of the last dozen doughnuts is equal to the marginal social cost

The annual Great Sofa Round-up is a collaborative event between Colorado State University and the City of Fort Collins aims to help students and neighbors get rid of unwanted furniture, while giving people in need access to inexpensive sofas. Suppose on the day of the Round-up, your friends take their couches to the main parking lot on campus where the Round-up is held. Raj will not sell his couch for less than $30, Emily will not sell her couch for less than $50, Nara will not sell her couch for less than $20, Sergio just wants to get rid of his couch and he is willing to give it away for free. At the Round-up, potential buyers think that all the couches available are basically the same and they are willing to buy a couch for $50. Who will sell their couch?

Which of the following CORRECTLY defines utilitarianism?

Consumer surplus is the value of a good minus the cost of producing it, summed over the quantity bought.