Question 1

The symmetry principle in economics means that

Accepted Answer

A)  all individuals must have similar outcomes. 
B)  all similar individuals must be treated similarly. 
C)  individuals must have opposite outcomes. 
D)  similar individuals must have similar outcomes. 
A)  all individuals must have similar outcomes. 
B)  all similar individuals must be treated similarly. 
C)  individuals must have opposite outcomes. 
D)  similar individuals must have similar outcomes.

Question 2

-In the above figure, what is the efficient quantity of pretzels to produce each day?

Accepted Answer

A)  one hundred 
B)  two hundred 
C)  three hundred 
D)  four hundred 
A)  one hundred 
B)  two hundred 
C)  three hundred 
D)  four hundred

Question 3

-In the above figure, suppose that the government sets a limit that may be produced of 10 units of output and the price rises to $4. In comparison to a competitive market the producer surplus would rise by

Accepted Answer

A)  $0. 
B)  $5. 
C)  $15. 
D)  $20. 
A)  $0. 
B)  $5. 
C)  $15. 
D)  $20.

Question 4

"A demand curve is the same as a marginal cost curve." Is this statement correct or incorrect? Explain your answer.

Accepted Answer

The statement is incorrect. A demand cur

Question 5

-The figure shows the demand curve for hotel rooms at a local resort.
a) If the hotel charges $120 per night, how many rooms will they rent?
b) If there are only 40 rooms available, how much are customers willing to pay for a room?
c) If 60 rooms are available, how much are customers willing to pay?
d) What do the dollars in your answer to part (c) represent?

Accepted Answer

a) At $120 a night, the hotel will rent

Question 6

What is producer surplus?

Accepted Answer

Producer surplus is the price

Question 7

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. To receive a gasoline ration card, a person had to certify a need for gas. The ration cards ranged from the most limited A card which only allowed 3 to 4 gallons per week to the most generous X card, which allowed the carrier to buy an unlimited amount of gasoline. A government entity, the War Price and Rationing Board, decided who received and A or an X card. Gasoline cards were allocated through

Accepted Answer

A)  command. 
B)  market price. 
C)  majority rule. 
D)  force. 
A)  command. 
B)  market price. 
C)  majority rule. 
D)  force.

Question 8

-The figure above shows the market for milk. If 250 gallons of milk a day are available, the ________ price that consumers are willing to pay for the last gallon is ________.

Accepted Answer

A)  maximum; $2.50 
B)  minimum; $2.50 
C)  maximum; $3.25 
D)  minimum; $3.25 
A)  maximum; $2.50 
B)  minimum; $2.50 
C)  maximum; $3.25 
D)  minimum; $3.25

Question 9

Market failure is the situation in which a market delivers an inefficient outcome.

Accepted Answer

A) True 
 B)False

Question 10

A firm that is the only seller of a product and is in sole control of a market has a

Accepted Answer

A)  monopoly. 
B)  quantity regulations. 
C)  subsidy. 
D)  public good. 
A)  monopoly. 
B)  quantity regulations. 
C)  subsidy. 
D)  public good.

Question 11

Producer surplus is the price received ________ summed over the quantity sold.

Accepted Answer

A)  plus the consumer surplus 
B)  multiplied by the quantity sold 
C)  minus its marginal cost of production 
D)  subtracted from the value of the good 
A)  plus the consumer surplus 
B)  multiplied by the quantity sold 
C)  minus its marginal cost of production 
D)  subtracted from the value of the good

Question 12

-In the above table, what is the minimum price that producers must be offered to produce the 200th brownie?

Accepted Answer

A)  0 
B)  20¢ 
C)  60¢ 
D)  80¢ 
A)  0 
B)  20¢ 
C)  60¢ 
D)  80¢

Question 13

If there are no external costs or benefits, no price or quantity regulations, no taxes or subsidies, and the good is not a public good or a common resource, then efficiency is

Accepted Answer

A)  achieved when a monopoly produces the good. 
B)  achieved when the good is produced in a competitive market. 
C)  achieved when the amount of output exceeds the amount produced in a competitive market. 
D)  unrelated to the amount produced in a competitive market. 
A)  achieved when a monopoly produces the good. 
B)  achieved when the good is produced in a competitive market. 
C)  achieved when the amount of output exceeds the amount produced in a competitive market. 
D)  unrelated to the amount produced in a competitive market.

Question 14

-The diagram above depicts the market demand for, and market price of, buckets of raw oysters in Orlando.
a) What is the consumer surplus of the person who buys the 100th bucket of oysters?
b) What is the consumer surplus of the person who buys the 200th bucket of oysters?
c) What is the consumer surplus of the person who buys the 300th bucket of oysters?
d) What is the consumer surplus in the market?

Accepted Answer

a) The consumer surplus of the person wh

Question 15

-In the above figure, the marginal cost of the second ton of wheat is

Accepted Answer

A)  $25. 
B)  $50. 
C)  $75. 
D)  none of the above. 
A)  $25. 
B)  $50. 
C)  $75. 
D)  none of the above.

Question 16

If the market for roller blades is at a competitive equilibrium, and there are no external costs or benefits, then

Accepted Answer

A)  marginal social benefit is equal to marginal social cost. 
B)  the sum of consumer surplus and producer surplus is maximized. 
C)  resources are being used efficiently. 
D)  All of the above answers are correct. 
A)  marginal social benefit is equal to marginal social cost. 
B)  the sum of consumer surplus and producer surplus is maximized. 
C)  resources are being used efficiently. 
D)  All of the above answers are correct.

Question 17

-In the above figure, at the equilibrium price and quantity, consumer surplus is

Accepted Answer

A)  $90. 
B)  $60. 
C)  $45. 
D)  $30. 
A)  $90. 
B)  $60. 
C)  $45. 
D)  $30.

Question 18

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

Accepted Answer

A)  marginal social benefit exceeds marginal social cost. 
B)  marginal social benefit equals marginal social cost. 
C)  marginal social cost exceeds marginal social benefit. 
D)  the deadweight loss is zero. 
A)  marginal social benefit exceeds marginal social cost. 
B)  marginal social benefit equals marginal social cost. 
C)  marginal social cost exceeds marginal social benefit. 
D)  the deadweight loss is zero.

Question 19

-The figure above shows the market supply and market demand for pizza.
a) What is the efficient quantity of pizzas?
b) If 70,000 pizzas are produced, what area represents the deadweight loss?
c) Why does the deadweight loss in part (b) occur?
d) If 20,000 pizzas are produced, what area represents the deadweight loss?
e) Why does the deadweight loss in part (d) occur?

Accepted Answer

a) 40,000 pizzas is the efficient quanti

Question 20

When economists refer to "the invisible hand," what do they mean?

Accepted Answer

In his book, Wealth of Nations, Adam Smi

The symmetry principle in economics means that

-In the above figure, what is the efficient quantity of pretzels to produce each day?

-In the above figure, suppose that the government sets a limit that may be produced of 10 units of output and the price rises to $4. In comparison to a competitive market the producer surplus would rise by

"A demand curve is the same as a marginal cost curve." Is this statement correct or incorrect? Explain your answer.

What is producer surplus?

-The figure above shows the market for milk. If 250 gallons of milk a day are available, the price that consumers are willing to pay for the last gallon is .

Market failure is the situation in which a market delivers an inefficient outcome.

A firm that is the only seller of a product and is in sole control of a market has a

Producer surplus is the price received ________ summed over the quantity sold.

-In the above table, what is the minimum price that producers must be offered to produce the 200th brownie?

If there are no external costs or benefits, no price or quantity regulations, no taxes or subsidies, and the good is not a public good or a common resource, then efficiency is

-In the above figure, the marginal cost of the second ton of wheat is

If the market for roller blades is at a competitive equilibrium, and there are no external costs or benefits, then

-In the above figure, at the equilibrium price and quantity, consumer surplus is

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

When economists refer to "the invisible hand," what do they mean?

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

The symmetry principle in economics means that

-In the above figure, what is the efficient quantity of pretzels to produce each day?

-In the above figure, suppose that the government sets a limit that may be produced of 10 units of output and the price rises to $4. In comparison to a competitive market the producer surplus would rise by

"A demand curve is the same as a marginal cost curve." Is this statement correct or incorrect? Explain your answer.

What is producer surplus?

-The figure above shows the market for milk. If 250 gallons of milk a day are available, the ________ price that consumers are willing to pay for the last gallon is ________.

Market failure is the situation in which a market delivers an inefficient outcome.

A firm that is the only seller of a product and is in sole control of a market has a

Producer surplus is the price received ________ summed over the quantity sold.

-In the above table, what is the minimum price that producers must be offered to produce the 200th brownie?

If there are no external costs or benefits, no price or quantity regulations, no taxes or subsidies, and the good is not a public good or a common resource, then efficiency is

-In the above figure, the marginal cost of the second ton of wheat is

If the market for roller blades is at a competitive equilibrium, and there are no external costs or benefits, then

-In the above figure, at the equilibrium price and quantity, consumer surplus is

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

When economists refer to "the invisible hand," what do they mean?

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

-The figure above shows the market for milk. If 250 gallons of milk a day are available, the price that consumers are willing to pay for the last gallon is .