Question 1

Alice is willing to pay $3 for the second slice of pizza she eats. The price she pays is $2. Alice's consumer surplus for this slice of pizza equals

Accepted Answer

A)  $0. 
B)  $1. 
C)  $2. 
D)  $3. 
A)  $0. 
B)  $1. 
C)  $2. 
D)  $3.

Question 2

Command system allocates resources by the order of someone in authority.

Accepted Answer

A) True 
 B)False

Question 3

Underproduction of a good ________ create a deadweight loss and overproduction of a good ________ create a deadweight loss.

Accepted Answer

A)  will; will 
B)  will; will not 
C)  will not; will 
D)  will not; will not 
A)  will; will 
B)  will; will not 
C)  will not; will 
D)  will not; will not

Question 4

A new car in the dealer's showroom had a sticker price of $35,900. Sally liked the car but decided she would pay no more than $32,000 for it, otherwise she would do without it. After haggling with the dealer, she purchased the car for $31,500. Did she gain any consumers surplus? If so, how much? If not, why not?

Accepted Answer

Yes. Consumer surplus is the difference

Question 5

Jane is willing to pay $4 for the first cup of coffee a day, $2.50 for the second cup, and $1 for the third cup, after which she won't buy any coffee. The price of a cup of coffee is $2.40. Jane's consumer surplus from the coffee she buys is ________ per day.

Accepted Answer

A)  $1.60 
B)  $1.70 
C)  $4.80 
D)  $6.50 
A)  $1.60 
B)  $1.70 
C)  $4.80 
D)  $6.50

Question 6

Utilitarianism argues that

Accepted Answer

A)  Only equality brings efficiency. 
B)  There is a tradeoff between equality and efficiency. 
C)  The result is fair if the rules are fair. 
D)  The competitive market is fair. 
A)  Only equality brings efficiency. 
B)  There is a tradeoff between equality and efficiency. 
C)  The result is fair if the rules are fair. 
D)  The competitive market is fair.

Question 7

Can both producer surplus and consumer surplus exist at the same time in a particular market?

Accepted Answer

Yes. The actual price can be a

Question 8

Bill Gates is the world's second richest person whose net worth is estimated at $54 billion. The idea that Bill Gates marginal utility for his 54 billionth dollar is less than someone else's 1000th dollar is the

Accepted Answer

A)  "Utilitarian" principle. 
B)  "Big Tradeoff" principle. 
C)  "Make the Poorest as Well Off as Possible" principle. 
D)  "Equity" principle. 
A)  "Utilitarian" principle. 
B)  "Big Tradeoff" principle. 
C)  "Make the Poorest as Well Off as Possible" principle. 
D)  "Equity" principle.

Question 9

-The figure above shows the market for coffee. When the efficient quantity of coffee is produced, the marginal social cost of the last pound is

Accepted Answer

A)  $2.50. 
B)  $3.50. 
C)  $3.00. 
D)  $2.00. 
A)  $2.50. 
B)  $3.50. 
C)  $3.00. 
D)  $2.00.

Question 10

Colorado State University allocates 10,000 tickets for each home game to students at no cost. Students are required to stand in line and prove they are a full time student to receive a free ticket. Community members can purchase season tickets or tickets to an individual game. How are football tickets allocated to community members?

Accepted Answer

A)  market price 
B)  command 
C)  first-come, first-served 
D)  personal characteristics 
A)  market price 
B)  command 
C)  first-come, first-served 
D)  personal characteristics

Question 11

-The figure above shows the market for coffee. If 30 pound of coffee a month are available, the ________ price that consumers are willing to pay for the last pound is ________.

Accepted Answer

A)  maximum; $4.00 
B)  minimum; $4.00 
C)  maximum; $2.50 
D)  minimum; $2.50 
A)  maximum; $4.00 
B)  minimum; $4.00 
C)  maximum; $2.50 
D)  minimum; $2.50

Question 12

An external benefit is a benefit that

Accepted Answer

A)  is enjoyed by someone other than the buyer of a good. 
B)  always equals external cost. 
C)  experiences increasing marginal returns. 
D)  is greatest at the equilibrium point. 
A)  is enjoyed by someone other than the buyer of a good. 
B)  always equals external cost. 
C)  experiences increasing marginal returns. 
D)  is greatest at the equilibrium point.

Question 13

Moving down along the market demand curve for hot dogs, the as more hot dogs are consumed the

Accepted Answer

A)  maximum price that people are willing to pay for hot dogs increases. 
B)  marginal social benefit of hot dogs decreases. 
C)  marginal social cost of hot dogs increases. 
D)  consumer surplus of the last hot dog consumed increases. 
A)  maximum price that people are willing to pay for hot dogs increases. 
B)  marginal social benefit of hot dogs decreases. 
C)  marginal social cost of hot dogs increases. 
D)  consumer surplus of the last hot dog consumed increases.

Question 14

The figure shows the competitive market for milk.
-In the figure above, when the quantity of milk produced is 300 gallons per day, what is the deadweight loss?

Accepted Answer

A)  $62.50 
B)  $125 
C)  $200 
D)  $937.50 
A)  $62.50 
B)  $125 
C)  $200 
D)  $937.50

Question 15

-The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. What is the marginal social benefit from the 100th pound of chocolate each day?

Accepted Answer

A)  $1.50 per pound 
B)  $1.00 per pound 
C)  $0.50 per pound 
D)  None of the above answers is correct. 
A)  $1.50 per pound 
B)  $1.00 per pound 
C)  $0.50 per pound 
D)  None of the above answers is correct.

Question 16

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 TRUE in the market for beef?

Accepted Answer

A)  Consumer surplus will decrease. 
B)  Producer surplus will increase. 
C)  Equilibrium price will decrease. 
D)  Equilibrium quantity will increase. 
A)  Consumer surplus will decrease. 
B)  Producer surplus will increase. 
C)  Equilibrium price will decrease. 
D)  Equilibrium quantity will increase.

Question 17

"If there is an inefficient level of nursing care in South America, a deadweight loss exists." Is this statement true or false?

Accepted Answer

The statement is true. Anytime

Question 18

If the price of a pizza increases and the demand curve for pizza does NOT shift, then the consumer surplus from pizza will

Accepted Answer

A)  increase. 
B)  decrease. 
C)  equal the producer surplus if the market produces the efficient quantity of pizza. 
D)  remain the same. 
A)  increase. 
B)  decrease. 
C)  equal the producer surplus if the market produces the efficient quantity of pizza. 
D)  remain the same.

Question 19

-In the above figure, what is the marginal social benefit of the four-hundredth pretzel?

Accepted Answer

A)  $0 
B)  $2.00 
C)  $3.00 
D)  $4.00 
A)  $0 
B)  $2.00 
C)  $3.00 
D)  $4.00

Question 20

-The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon, then Dana's consumer surplus from the 4th gallon

Accepted Answer

A)  is greater than her consumer surplus from the 8th gallon. 
B)  is the same as her consumer surplus from the 8th gallon. 
C)  is less than her consumer surplus from the 8th gallon. 
D)  could be greater than, equal to, or less than the consumer surplus from the 8th gallon. 
A)  is greater than her consumer surplus from the 8th gallon. 
B)  is the same as her consumer surplus from the 8th gallon. 
C)  is less than her consumer surplus from the 8th gallon. 
D)  could be greater than, equal to, or less than the consumer surplus from the 8th gallon.

Alice is willing to pay $3 for the second slice of pizza she eats. The price she pays is $2. Alice's consumer surplus for this slice of pizza equals

Command system allocates resources by the order of someone in authority.

Underproduction of a good create a deadweight loss and overproduction of a good create a deadweight loss.

Jane is willing to pay $4 for the first cup of coffee a day, $2.50 for the second cup, and $1 for the third cup, after which she won't buy any coffee. The price of a cup of coffee is $2.40. Jane's consumer surplus from the coffee she buys is ________ per day.

Utilitarianism argues that

Can both producer surplus and consumer surplus exist at the same time in a particular market?

Bill Gates is the world's second richest person whose net worth is estimated at $54 billion. The idea that Bill Gates marginal utility for his 54 billionth dollar is less than someone else's 1000th dollar is the

-The figure above shows the market for coffee. When the efficient quantity of coffee is produced, the marginal social cost of the last pound is

-The figure above shows the market for coffee. If 30 pound of coffee a month are available, the price that consumers are willing to pay for the last pound is .

An external benefit is a benefit that

Moving down along the market demand curve for hot dogs, the as more hot dogs are consumed the

The figure shows the competitive market for milk. -In the figure above, when the quantity of milk produced is 300 gallons per day, what is the deadweight loss?

-The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. What is the marginal social benefit from the 100th pound of chocolate each day?

"If there is an inefficient level of nursing care in South America, a deadweight loss exists." Is this statement true or false?

If the price of a pizza increases and the demand curve for pizza does NOT shift, then the consumer surplus from pizza will

-In the above figure, what is the marginal social benefit of the four-hundredth pretzel?

-The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon, then Dana's consumer surplus from the 4th gallon

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

Alice is willing to pay $3 for the second slice of pizza she eats. The price she pays is $2. Alice's consumer surplus for this slice of pizza equals

Command system allocates resources by the order of someone in authority.

Underproduction of a good ________ create a deadweight loss and overproduction of a good ________ create a deadweight loss.

Jane is willing to pay $4 for the first cup of coffee a day, $2.50 for the second cup, and $1 for the third cup, after which she won't buy any coffee. The price of a cup of coffee is $2.40. Jane's consumer surplus from the coffee she buys is ________ per day.

Utilitarianism argues that

Can both producer surplus and consumer surplus exist at the same time in a particular market?

Bill Gates is the world's second richest person whose net worth is estimated at $54 billion. The idea that Bill Gates marginal utility for his 54 billionth dollar is less than someone else's 1000th dollar is the

-The figure above shows the market for coffee. When the efficient quantity of coffee is produced, the marginal social cost of the last pound is

-The figure above shows the market for coffee. If 30 pound of coffee a month are available, the ________ price that consumers are willing to pay for the last pound is ________.

An external benefit is a benefit that

Moving down along the market demand curve for hot dogs, the as more hot dogs are consumed the

The figure shows the competitive market for milk. -In the figure above, when the quantity of milk produced is 300 gallons per day, what is the deadweight loss?

-The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. What is the marginal social benefit from the 100th pound of chocolate each day?

"If there is an inefficient level of nursing care in South America, a deadweight loss exists." Is this statement true or false?

If the price of a pizza increases and the demand curve for pizza does NOT shift, then the consumer surplus from pizza will

-In the above figure, what is the marginal social benefit of the four-hundredth pretzel?

-The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon, then Dana's consumer surplus from the 4th gallon

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

Underproduction of a good create a deadweight loss and overproduction of a good create a deadweight loss.

-The figure above shows the market for coffee. If 30 pound of coffee a month are available, the price that consumers are willing to pay for the last pound is .