Question 1

Total surplus is defined as

Accepted Answer

A)  consumer surplus + producer surplus. 
B)  consumer surplus - producer surplus. 
C)  another word for profit. 
D)  another word for total revenue. 
A)  consumer surplus + producer surplus. 
B)  consumer surplus - producer surplus. 
C)  another word for profit. 
D)  another word for total revenue.

Question 2

A deadweight loss is created

Accepted Answer

A)  only if the last unit produced has a marginal social benefit greater than its marginal social cost. 
B)  only if the last unit produced has a marginal social cost greater than its marginal social benefit. 
C)  only if the last unit produced has a marginal social benefit equal to its marginal social cost. 
D)  if for the last unit produced, marginal social cost is greater than its marginal social benefit or if its marginal social benefit is greater than its marginal social cost. 
A)  only if the last unit produced has a marginal social benefit greater than its marginal social cost. 
B)  only if the last unit produced has a marginal social cost greater than its marginal social benefit. 
C)  only if the last unit produced has a marginal social benefit equal to its marginal social cost. 
D)  if for the last unit produced, marginal social cost is greater than its marginal social benefit or if its marginal social benefit is greater than its marginal social cost.

Question 3

The latest model car in the dealer's showroom has a sticker price of $35,000.00. Fred, the shopper, has decided that he would pay no more than $32,000.00 for the car. After two hours of bargaining with the saleswoman, Fred actually purchases the car for $31,000.00. Fred, therefore, has obtained a consumer surplus of

Accepted Answer

A)  $35,000.00. 
B)  $32,000.00. 
C)  $4,000.00. 
D)  $1,000.00. 
A)  $35,000.00. 
B)  $32,000.00. 
C)  $4,000.00. 
D)  $1,000.00.

Question 4

Four people each have a different willingness to pay for one unit of a good: George will pay $15, Glen will pay $12, Tom will pay $10, and Peter will pay $8. If price is equal to $9 per unit then the quantity demanded in the market will be ________ and the consumer surplus for this unit will be ________.

Accepted Answer

A)  3; $10 
B)  3; $37 
C)  3; $36 
D)  4; $8 
A)  3; $10 
B)  3; $37 
C)  3; $36 
D)  4; $8

Question 5

-In the above figure, 300,000 purses per month is

Accepted Answer

A)  the efficient amount to produce because consumer surplus is maximized. 
B)  the efficient amount to produce because the sum of consumer surplus and producer surplus is maximized. 
C)  an inefficient amount to produce because consumer surplus is not maximized. 
D)  an inefficient amount to produce because the sum of consumer surplus and producer surplus is not maximized. 
A)  the efficient amount to produce because consumer surplus is maximized. 
B)  the efficient amount to produce because the sum of consumer surplus and producer surplus is maximized. 
C)  an inefficient amount to produce because consumer surplus is not maximized. 
D)  an inefficient amount to produce because the sum of consumer surplus and producer surplus is not maximized.

Question 6

-In the above figure, the deadweight loss is zero if output is

Accepted Answer

A)  0 units. 
B)  10 units. 
C)  20 units. 
D)  30 units. 
A)  0 units. 
B)  10 units. 
C)  20 units. 
D)  30 units.

Question 7

-What area in the above figure is the producer surplus at the efficient quantity?

Accepted Answer

A)  A 
B)  A + B + C 
C)  F 
D)  D + E + F 
A)  A 
B)  A + B + C 
C)  F 
D)  D + E + F

Question 8

Why is a competitive market efficient?

Accepted Answer

Efficiency is attained when production i

Question 9

Adam Smith argued that each person in a competitive market is led to promote the

Accepted Answer

A)  efficient use of society's resources, because each person's intention is to make society better off. 
B)  efficient use of society's resources, even though it is no person's intention to make society better off. 
C)  inefficient use of society's resources, even though each person's intention is to make society better off. 
D)  inefficient use of society's resources, because it is no person's intention to make society better off. 
A)  efficient use of society's resources, because each person's intention is to make society better off. 
B)  efficient use of society's resources, even though it is no person's intention to make society better off. 
C)  inefficient use of society's resources, even though each person's intention is to make society better off. 
D)  inefficient use of society's resources, because it is no person's intention to make society better off.

Question 10

The assertion that if resources are allocated efficiently, they also are allocated fairly is made by

Accepted Answer

A)  all utilitarians. 
B)  John Rawls, who proposed making the poorest as well off as possible. 
C)  Robert Nozick, who believes that equality of opportunity is fair. 
D)  all economists who understand the big tradeoff. 
A)  all utilitarians. 
B)  John Rawls, who proposed making the poorest as well off as possible. 
C)  Robert Nozick, who believes that equality of opportunity is fair. 
D)  all economists who understand the big tradeoff.

Question 11

Susan thinks the only fair outcome is one in which she has three slices of pizza a week. Susan is using a(n) ________ concept of fairness.

Accepted Answer

A)  "it's not fair if the result isn't fair" 
B)  "it's not fair if the rules aren't fair" 
C)  "big tradeoff" 
D)  "Novak principle" 
A)  "it's not fair if the result isn't fair" 
B)  "it's not fair if the rules aren't fair" 
C)  "big tradeoff" 
D)  "Novak principle"

Question 12

If the hot dog vendors at Yankee Stadium are earning a producer surplus on each hot dog they sell, then baseball fans cannot be gaining any consumer surplus on the hot dogs they buy.

Accepted Answer

A) True 
 B)False

Question 13

Consider the market for hot dogs. As long as the marginal benefit of consuming hot dogs is greater than the price of hot dogs

Accepted Answer

A)  people receive consumer surplus from eating hot dogs. 
B)  the price of hot dogs will rise. 
C)  the value of hot dogs will rise. 
D)  there is no decreasing marginal benefit of eating hot dogs. 
A)  people receive consumer surplus from eating hot dogs. 
B)  the price of hot dogs will rise. 
C)  the value of hot dogs will rise. 
D)  there is no decreasing marginal benefit of eating hot dogs.

Question 14

What is consumer surplus?

Accepted Answer

Consumer surplus equals the difference b

Question 15

Which of the following can prevent markets from reaching efficiency? I. decreasing marginal benefit
II) taxes
III) quantity regulations that limit the quantity that may be produced

Accepted Answer

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

Question 16

Charlene is willing to pay $5.00 for a sandwich. If Charlene must pay ________ for a sandwich, she ________.

Accepted Answer

A)  $4.00; does not receive consumer surplus 
B)  $4.00; receives consumer surplus 
C)  $6.00; receives consumer surplus 
D)  $6.00; receives a marginal cost 
A)  $4.00; does not receive consumer surplus 
B)  $4.00; receives consumer surplus 
C)  $6.00; receives consumer surplus 
D)  $6.00; receives a marginal cost

Question 17

-In the above figure, when the efficient quantity of gloves is produced, the total consumer 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 18

At the current quantity of pizza, the marginal social benefit is greater than the marginal social cost. Then

Accepted Answer

A)  the number of pizzas produced is efficient. 
B)  more pizzas must be produced to reach the efficient level. 
C)  fewer pizzas must be produced to reach the efficient level. 
D)  revenue for pizza producers is maximized. 
A)  the number of pizzas produced is efficient. 
B)  more pizzas must be produced to reach the efficient level. 
C)  fewer pizzas must be produced to reach the efficient level. 
D)  revenue for pizza producers is maximized.

Question 19

Suppose a tax is imposed on a good. This will

Accepted Answer

A)  increase the price paid by the buyer and decrease the price received by the seller. 
B)  increase the price paid by the buyer but leave the price received by the seller unchanged. 
C)  decrease the price received by the seller but leave the price received by the buyer unchanged. 
D)  increase the price received by the seller and decrease the price paid by the buyer. 
A)  increase the price paid by the buyer and decrease the price received by the seller. 
B)  increase the price paid by the buyer but leave the price received by the seller unchanged. 
C)  decrease the price received by the seller but leave the price received by the buyer unchanged. 
D)  increase the price received by the seller and decrease the price paid by the buyer.

Question 20

The table below shows the supply schedules for Fred's Pizza and Johnny's Pizza, the only sellers of pizza in the market.
  
-Using the table, Johnny's marginal cost of the 600th slice of pizza is

Accepted Answer

A)  $3.50. 
B)  $12.50. 
C)  zero. 
D)  $1.50. 
A)  $3.50. 
B)  $12.50. 
C)  zero. 
D)  $1.50.

Total surplus is defined as

A deadweight loss is created

Four people each have a different willingness to pay for one unit of a good: George will pay $15, Glen will pay $12, Tom will pay $10, and Peter will pay $8. If price is equal to $9 per unit then the quantity demanded in the market will be and the consumer surplus for this unit will be .

-In the above figure, 300,000 purses per month is

-In the above figure, the deadweight loss is zero if output is

-What area in the above figure is the producer surplus at the efficient quantity?

Why is a competitive market efficient?

Adam Smith argued that each person in a competitive market is led to promote the

The assertion that if resources are allocated efficiently, they also are allocated fairly is made by

Susan thinks the only fair outcome is one in which she has three slices of pizza a week. Susan is using a(n) ________ concept of fairness.

If the hot dog vendors at Yankee Stadium are earning a producer surplus on each hot dog they sell, then baseball fans cannot be gaining any consumer surplus on the hot dogs they buy.

Consider the market for hot dogs. As long as the marginal benefit of consuming hot dogs is greater than the price of hot dogs

What is consumer surplus?

Which of the following can prevent markets from reaching efficiency? I. decreasing marginal benefit II) taxes III) quantity regulations that limit the quantity that may be produced

Charlene is willing to pay $5.00 for a sandwich. If Charlene must pay for a sandwich, she .

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

At the current quantity of pizza, the marginal social benefit is greater than the marginal social cost. Then

Suppose a tax is imposed on a good. This will

The table below shows the supply schedules for Fred's Pizza and Johnny's Pizza, the only sellers of pizza in the market. -Using the table, Johnny's marginal cost of the 600th slice of pizza is

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

Total surplus is defined as

A deadweight loss is created

-In the above figure, 300,000 purses per month is

-In the above figure, the deadweight loss is zero if output is

-What area in the above figure is the producer surplus at the efficient quantity?

Why is a competitive market efficient?

Adam Smith argued that each person in a competitive market is led to promote the

The assertion that if resources are allocated efficiently, they also are allocated fairly is made by

Susan thinks the only fair outcome is one in which she has three slices of pizza a week. Susan is using a(n) ________ concept of fairness.

If the hot dog vendors at Yankee Stadium are earning a producer surplus on each hot dog they sell, then baseball fans cannot be gaining any consumer surplus on the hot dogs they buy.

Consider the market for hot dogs. As long as the marginal benefit of consuming hot dogs is greater than the price of hot dogs

What is consumer surplus?

Which of the following can prevent markets from reaching efficiency? I. decreasing marginal benefit II) taxes III) quantity regulations that limit the quantity that may be produced

Charlene is willing to pay $5.00 for a sandwich. If Charlene must pay ________ for a sandwich, she ________.

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

At the current quantity of pizza, the marginal social benefit is greater than the marginal social cost. Then

Suppose a tax is imposed on a good. This will

The table below shows the supply schedules for Fred's Pizza and Johnny's Pizza, the only sellers of pizza in the market. -Using the table, Johnny's marginal cost of the 600th slice of pizza is

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

Charlene is willing to pay $5.00 for a sandwich. If Charlene must pay for a sandwich, she .