Question 1

-In the above figure, when the efficient quantity of gloves is produced, the total producer surplus is

Accepted Answer

A)  $3,000. 
B)  $15,000. 
C)  $22,500. 
D)  $45,000. 
A)  $3,000. 
B)  $15,000. 
C)  $22,500. 
D)  $45,000.

Question 2

-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 of producing the 200th dozen doughnuts each day?

Accepted Answer

A)  $10.00 per dozen 
B)  $8.00 per dozen 
C)  $6.00 per dozen 
D)  $4.00 per dozen 
A)  $10.00 per dozen 
B)  $8.00 per dozen 
C)  $6.00 per dozen 
D)  $4.00 per dozen

Question 3

-In the above figure, the total consumer surplus at the efficient level of output is

Accepted Answer

A)  $4.5 million. 
B)  $9.0 million. 
C)  $2.5 million. 
D)  $8.5 million. 
A)  $4.5 million. 
B)  $9.0 million. 
C)  $2.5 million. 
D)  $8.5 million.

Question 4

-At the competitive market outcome in the above figure, the

Accepted Answer

A)  producer surplus is equal to $480 million. 
B)  total producer surplus from turkey sales is zero. 
C)  sum of consumer and producer surpluses from turkey is $640 million. 
D)  All of the above answers are correct. 
A)  producer surplus is equal to $480 million. 
B)  total producer surplus from turkey sales is zero. 
C)  sum of consumer and producer surpluses from turkey is $640 million. 
D)  All of the above answers are correct.

Question 5

One of the obstacles to efficiency is monopoly.

Accepted Answer

A) True 
 B)False

Question 6

What is the "big tradeoff"?

Accepted Answer

The "big tradeoff" is the tradeoff betwe

Question 7

-The figure above shows Clara's demand for CDs. The price for a CD is $15. Which statement is TRUE?

Accepted Answer

A)  When Clara buys 6 CDs, she receives $15 of consumer surplus on her 6th CD. 
B)  When Clara buys 6 CDs, she receives a total of $15 of consumer surplus. 
C)  When Clara buys 6 CDs, she receives a total of $30 of consumer surplus. 
D)  When Clara buys 6 CDs, she receives a total of $45 of consumer surplus. 
A)  When Clara buys 6 CDs, she receives $15 of consumer surplus on her 6th CD. 
B)  When Clara buys 6 CDs, she receives a total of $15 of consumer surplus. 
C)  When Clara buys 6 CDs, she receives a total of $30 of consumer surplus. 
D)  When Clara buys 6 CDs, she receives a total of $45 of consumer surplus.

Question 8

-In the figure above, when production is 3 units with a price of $3, the consumer surplus equals

Accepted Answer

A)  a + b. 
B)  a + b + f + g. 
C)  a + b + f + g + h + l. 
D)  a + b + f + g + h + l + i + m. 
A)  a + b. 
B)  a + b + f + g. 
C)  a + b + f + g + h + l. 
D)  a + b + f + g + h + l + i + m.

Question 9

Adam makes $25,000 per year and Bob makes $45,000 a year, and they both have the same marginal benefit curve. According to the utilitarian view, if a dollar is transferred from Bob to Adam, then

Accepted Answer

A)  the change in Adam's marginal benefit plus the change in Bob's marginal benefit is negative. 
B)  Adam's marginal benefit increases by more than Bob's marginal benefit decreases. 
C)  the change in Adam's marginal benefit plus the change in Bob's marginal benefit equals zero. 
D)  Adam's marginal benefit decreases by more than Bob's marginal benefit increases. 
A)  the change in Adam's marginal benefit plus the change in Bob's marginal benefit is negative. 
B)  Adam's marginal benefit increases by more than Bob's marginal benefit decreases. 
C)  the change in Adam's marginal benefit plus the change in Bob's marginal benefit equals zero. 
D)  Adam's marginal benefit decreases by more than Bob's marginal benefit increases.

Question 10

-The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. There is no external benefit nor external cost. The demand curve for chocolate is the same as the

Accepted Answer

A)  marginal social cost curve of chocolate. 
B)  marginal social benefit curve of chocolate. 
C)  opportunity cost curve of chocolate. 
D)  marginal social benefit curve minus the marginal social cost curve of chocolate. 
A)  marginal social cost curve of chocolate. 
B)  marginal social benefit curve of chocolate. 
C)  opportunity cost curve of chocolate. 
D)  marginal social benefit curve minus the marginal social cost curve of chocolate.

Question 11

The resource allocation method that is used to allocate scarce resources between private use and government use is

Accepted Answer

A)  first-come, first-served. 
B)  personal characteristics. 
C)  majority rule. 
D)  lottery. 
A)  first-come, first-served. 
B)  personal characteristics. 
C)  majority rule. 
D)  lottery.

Question 12

When the efficient quantity of output is being produced and sold, the deadweight loss is maximized.

Accepted Answer

A) True 
 B)False

Question 13

-The figure above shows the market for ink-jet printers.
a) What are the equilibrium price and equilibrium quantity of printers? Is this equilibrium efficient? Explain.
b) Calculate the total amount consumers paid for printers bought.
c) Calculate the consumer surplus.
d) Calculate the producer surplus.

Accepted Answer

a) The equilibrium price is $100 and the

Question 14

Which of the following can prevent markets from reaching the efficient level of production? I. a monopoly
II) taxes
III) the product is a public good

Accepted Answer

A)  I and II 
B)  II 
C)  II and III 
D)  I, II and III 
A)  I and II 
B)  II 
C)  II and III 
D)  I, II and III

Question 15

Which of the following arguments support the proposition that society should accept at least some income inequality?

Accepted Answer

A)  Income redistribution will require taxation, causing inefficiently low levels of labor supply and saving, thus decreasing the size of the economic pie. 
B)  Administrative costs associated with income redistribution imply that low-income people receive less than $1 for each dollar taken from high-income people. 
C)  Income redistribution programs divert skilled labor and capital to tax compliance activities and away from production of goods and services that people value. 
D)  All of the above answers are correct because all support the proposition that society should accept some income inequality. 
A)  Income redistribution will require taxation, causing inefficiently low levels of labor supply and saving, thus decreasing the size of the economic pie. 
B)  Administrative costs associated with income redistribution imply that low-income people receive less than $1 for each dollar taken from high-income people. 
C)  Income redistribution programs divert skilled labor and capital to tax compliance activities and away from production of goods and services that people value. 
D)  All of the above answers are correct because all support the proposition that society should accept some income inequality.

Question 16

-The figure above shows the market for milk. If the government pays the milk producers a subsidy and production increases to 300 gallons per day

Accepted Answer

A)  the market is efficient because the marginal social benefit from the last gallon of milk exceeds its marginal social cost. 
B)  the market is efficient because the total social benefit from milk exceed the total social cost. 
C)  there is a deadweight loss because the marginal social benefit from the last gallon of milk exceeds its marginal social cost. 
D)  there is a deadweight loss because the marginal social cost of the last gallon of milk exceeds its marginal social benefit. 
A)  the market is efficient because the marginal social benefit from the last gallon of milk exceeds its marginal social cost. 
B)  the market is efficient because the total social benefit from milk exceed the total social cost. 
C)  there is a deadweight loss because the marginal social benefit from the last gallon of milk exceeds its marginal social cost. 
D)  there is a deadweight loss because the marginal social cost of the last gallon of milk exceeds its marginal social benefit.

Question 17

-The figure tells us about the market for red roses. The consumer surplus is ________ a day.

Accepted Answer

A)  $800 
B)  $200 
C)  $1,000 
D)  $20 
A)  $800 
B)  $200 
C)  $1,000 
D)  $20

Question 18

-The schedules in the table give the marginal social benefit and marginal social cost of a DVD. If the number of DVD produced is cut to 2 a week, then the

Accepted Answer

A)  minimum supply-price of the second DVD is $18. 
B)  price is $18 a DVD. 
C)  opportunity cost of the second DVD is $22. 
D)  value of the second DVD is $20. 
A)  minimum supply-price of the second DVD is $18. 
B)  price is $18 a DVD. 
C)  opportunity cost of the second DVD is $22. 
D)  value of the second DVD is $20.

Question 19

Is the marginal benefit someone receives from a good or service the same as the price the person pays? Explain your answer.

Accepted Answer

Generally the marginal benefit of a good

Question 20

At the quantity of 200 bushels of apples, the marginal social benefit of a bushel of apples is $100 and the marginal social cost is $50. To produce the efficient quantity of apples

Accepted Answer

A)  more apples should be produced. 
B)  fewer apples should be produced. 
C)  there should be no change in the amount of apples produced. 
D)  More information on the willingness of consumers to purchase apples is needed to determine the efficient level of apples. 
A)  more apples should be produced. 
B)  fewer apples should be produced. 
C)  there should be no change in the amount of apples produced. 
D)  More information on the willingness of consumers to purchase apples is needed to determine the efficient level of apples.

-In the above figure, when the efficient quantity of gloves is produced, the total producer surplus is

-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 of producing the 200th dozen doughnuts each day?

-In the above figure, the total consumer surplus at the efficient level of output is

-At the competitive market outcome in the above figure, the

One of the obstacles to efficiency is monopoly.

What is the "big tradeoff"?

-The figure above shows Clara's demand for CDs. The price for a CD is $15. Which statement is TRUE?

-In the figure above, when production is 3 units with a price of $3, the consumer surplus equals

Adam makes $25,000 per year and Bob makes $45,000 a year, and they both have the same marginal benefit curve. According to the utilitarian view, if a dollar is transferred from Bob to Adam, then

-The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. There is no external benefit nor external cost. The demand curve for chocolate is the same as the

The resource allocation method that is used to allocate scarce resources between private use and government use is

When the efficient quantity of output is being produced and sold, the deadweight loss is maximized.

Which of the following can prevent markets from reaching the efficient level of production? I. a monopoly II) taxes III) the product is a public good

Which of the following arguments support the proposition that society should accept at least some income inequality?

-The figure above shows the market for milk. If the government pays the milk producers a subsidy and production increases to 300 gallons per day

-The figure tells us about the market for red roses. The consumer surplus is ________ a day.

-The schedules in the table give the marginal social benefit and marginal social cost of a DVD. If the number of DVD produced is cut to 2 a week, then the

Is the marginal benefit someone receives from a good or service the same as the price the person pays? Explain your answer.

At the quantity of 200 bushels of apples, the marginal social benefit of a bushel of apples is $100 and the marginal social cost is $50. To produce the efficient quantity of apples

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 5: Efficiency and Equity

-In the above figure, when the efficient quantity of gloves is produced, the total producer surplus is

-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 of producing the 200th dozen doughnuts each day?

-In the above figure, the total consumer surplus at the efficient level of output is

-At the competitive market outcome in the above figure, the

One of the obstacles to efficiency is monopoly.

What is the "big tradeoff"?

-The figure above shows Clara's demand for CDs. The price for a CD is $15. Which statement is TRUE?

-In the figure above, when production is 3 units with a price of $3, the consumer surplus equals

Adam makes $25,000 per year and Bob makes $45,000 a year, and they both have the same marginal benefit curve. According to the utilitarian view, if a dollar is transferred from Bob to Adam, then

-The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. There is no external benefit nor external cost. The demand curve for chocolate is the same as the

The resource allocation method that is used to allocate scarce resources between private use and government use is

When the efficient quantity of output is being produced and sold, the deadweight loss is maximized.

Which of the following can prevent markets from reaching the efficient level of production? I. a monopoly II) taxes III) the product is a public good

Which of the following arguments support the proposition that society should accept at least some income inequality?

-The figure above shows the market for milk. If the government pays the milk producers a subsidy and production increases to 300 gallons per day

-The figure tells us about the market for red roses. The consumer surplus is ________ a day.

-The schedules in the table give the marginal social benefit and marginal social cost of a DVD. If the number of DVD produced is cut to 2 a week, then the

Is the marginal benefit someone receives from a good or service the same as the price the person pays? Explain your answer.

At the quantity of 200 bushels of apples, the marginal social benefit of a bushel of apples is $100 and the marginal social cost is $50. To produce the efficient quantity of apples

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters