Question 1

-The figure above shows the market for coffee. If one firm owns all the coffee outlets and sells 10 million pounds of coffee a month, the deadweight loss is

Accepted Answer

A)  zero. 
B)  $7.5 million. 
C)  $15 million. 
D)  $10 million 
A)  zero. 
B)  $7.5 million. 
C)  $15 million. 
D)  $10 million

Question 2

-In the above figure, if the production of gloves was restricted to 2,000 a day, then the deadweight loss would equal

Accepted Answer

A)  $0, because 2,000 gloves per day is an efficient quantity of gloves to produce. 
B)  $2,000. 
C)  $5,000. 
D)  $10,000. 
A)  $0, because 2,000 gloves per day is an efficient quantity of gloves to produce. 
B)  $2,000. 
C)  $5,000. 
D)  $10,000.

Question 3

If the government restricts the selling of corn so that the quantity is less than the equilibrium quantity, then the policy I. creates a deadweight loss.
II) decreases total surplus.

Accepted Answer

A)  Only I is correct. 
B)  Only II is correct. 
C)  Both I and II are correct. 
D)  Neither I nor II is correct. 
A)  Only I is correct. 
B)  Only II is correct. 
C)  Both I and II are correct. 
D)  Neither I nor II is correct.

Question 4

-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. The total deadweight loss would be

Accepted Answer

A)  $0. 
B)  $10. 
C)  $15. 
D)  $20. 
A)  $0. 
B)  $10. 
C)  $15. 
D)  $20.

Question 5

When 2,000 hamburgers per day are produced, the marginal social benefit is $1.50 and the marginal social cost is $1.00. And when 7,500 hamburgers per day are produced, the marginal social benefit is $1.00 and the marginal social cost is $1.50. The efficient production quantity of hamburgers is ________ a day.

Accepted Answer

A)  more than 7,500 
B)  7,500 
C)  between 2,000 and 7,500 
D)  2,000 
A)  more than 7,500 
B)  7,500 
C)  between 2,000 and 7,500 
D)  2,000

Question 6

-The figure above shows Clara's demand for CDs. At a price of $5 for a CD, the value of Clara's total consumer surplus for all the CDs she buys is

Accepted Answer

A)  $5. 
B)  $10. 
C)  $25. 
D)  $125. 
A)  $5. 
B)  $10. 
C)  $25. 
D)  $125.

Question 7

-In the above figure, what is the total consumer surplus from all the milk bought if the price of milk is $3.00 per gallon?

Accepted Answer

A)  $16 million 
B)  $12 million 
C)  $4 million 
D)  $2 million 
A)  $16 million 
B)  $12 million 
C)  $4 million 
D)  $2 million

Question 8

-In the above figure, when the quantity equals 400 pretzels

Accepted Answer

A)  consumers are willing to pay $2 for the 400th pretzel. 
B)  producers are willing to supply 400 pretzels for $3. 
C)  producers are willing to supply 400 pretzels for $2. 
D)  the marginal benefit is greater than the marginal cost. 
A)  consumers are willing to pay $2 for the 400th pretzel. 
B)  producers are willing to supply 400 pretzels for $3. 
C)  producers are willing to supply 400 pretzels for $2. 
D)  the marginal benefit is greater than the marginal cost.

Question 9

-The figure above shows the market for pizza.
a) If the price of a slice of pizza is $3, what is the consumer surplus of the 50th slice?
b) If the price of a slice of pizza is $3, what is the producer surplus of the 50th slice?
c) What is the efficient quantity? What is the equilibrium quantity? What is the deadweight loss when the equilibrium quantity is produced?

Accepted Answer

a) Consumer surplus is the distance betw

Question 10

-The figure illustrates the market for bagels. Initially the market is in equilibrium, Then the number of bagels produced is cut from 20 to 10 an hour and the price rises to $2.00 per bagel. Consumer surplus decreases by

Accepted Answer

A)  $5.00 an hour. 
B)  $2.50 an hour. 
C)  $7.50 an hour. 
D)  $0.50 a bagel. 
A)  $5.00 an hour. 
B)  $2.50 an hour. 
C)  $7.50 an hour. 
D)  $0.50 a bagel.

Question 11

-The figure above shows the market for hot dogs.
a) What is the maximum price consumers are willing to pay for the 25th hot dog?
b) What is the efficient quantity?
c) Suppose that the production was limited to 25 hot dogs. In the figure, indicate the amount of the deadweight loss.

Accepted Answer

a) Consumers are willing to pay a maximu

Question 12

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

Accepted Answer

A)  the 8th gallon. 
B)  the 12th gallon. 
C)  the 16th gallon. 
D)  the 20th gallon. 
A)  the 8th gallon. 
B)  the 12th gallon. 
C)  the 16th gallon. 
D)  the 20th gallon.

Question 13

Jenn is willing to pay $75 for a purse and the purse's price is $60. What is Jenn's consumer surplus?

Accepted Answer

The consumer surplus equals the differen

Question 14

Producer surplus is the price of a good minus the opportunity cost of producing it, summed over the quantity produced.

Accepted Answer

A) True 
 B)False

Question 15

The value of a good is equal to the

Accepted Answer

A)  maximum price you are willing to pay for it. 
B)  price that you actually pay for it. 
C)  price you actually pay for it minus the maximum you are willing to pay for it. 
D)  maximum you are willing to pay for it minus the price you actually pay for it. 
A)  maximum price you are willing to pay for it. 
B)  price that you actually pay for it. 
C)  price you actually pay for it minus the maximum you are willing to pay for it. 
D)  maximum you are willing to pay for it minus the price you actually pay for it.

Question 16

A market demand curve measures

Accepted Answer

A)  how much a consumer is willing to pay for an additional unit of the good. 
B)  the marginal social benefit of an additional unit of the good. 
C)  the marginal social cost of an additional unit of the good. 
D)  Both answers A and B are correct. 
A)  how much a consumer is willing to pay for an additional unit of the good. 
B)  the marginal social benefit of an additional unit of the good. 
C)  the marginal social cost of an additional unit of the good. 
D)  Both answers A and B are correct.

Question 17

American Idol is a popular television program where contestants compete to win a $1 million record deal. To determine the winner, fans either dial the number or send a text message indicating their favorite contestant. The contestant with the highest number of texts and phone calls wins. How is the scarce resource in this example allocated?

Accepted Answer

A)  majority rule 
B)  command 
C)  contest 
D)  personal characteristics 
A)  majority rule 
B)  command 
C)  contest 
D)  personal characteristics

Question 18

-In the above figure, if the market price is $100 per ton, then the firm's producer surplus on the second ton of wheat is

Accepted Answer

A)  $25. 
B)  $50. 
C)  $75. 
D)  $100. 
A)  $25. 
B)  $50. 
C)  $75. 
D)  $100.

Question 19

The symmetry principle is the requirement that

Accepted Answer

A)  people in similar situations be treated similarly. 
B)  Society's income be distributed symmetrically among its members. 
C)  the poorest 20 percent of households should receive the same total income as the richest 10 percent of households. 
D)  the average person be made as well off as possible. 
A)  people in similar situations be treated similarly. 
B)  Society's income be distributed symmetrically among its members. 
C)  the poorest 20 percent of households should receive the same total income as the richest 10 percent of households. 
D)  the average person be made as well off as possible.

Question 20

-In the figure above, for each CD, the price a consumer is willing to pay is equal to the

Accepted Answer

A)  economy's marginal social cost of producing that CD. 
B)  consumer's own marginal benefit from consuming that CD. 
C)  consumer's total consumer surplus. 
D)  Both answers A and B are correct. 
A)  economy's marginal social cost of producing that CD. 
B)  consumer's own marginal benefit from consuming that CD. 
C)  consumer's total consumer surplus. 
D)  Both answers A and B are correct.

-The figure above shows the market for coffee. If one firm owns all the coffee outlets and sells 10 million pounds of coffee a month, the deadweight loss is

-In the above figure, if the production of gloves was restricted to 2,000 a day, then the deadweight loss would equal

If the government restricts the selling of corn so that the quantity is less than the equilibrium quantity, then the policy I. creates a deadweight loss. II) decreases total surplus.

-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. The total deadweight loss would be

-The figure above shows Clara's demand for CDs. At a price of $5 for a CD, the value of Clara's total consumer surplus for all the CDs she buys is

-In the above figure, what is the total consumer surplus from all the milk bought if the price of milk is $3.00 per gallon?

-In the above figure, when the quantity equals 400 pretzels

-The figure illustrates the market for bagels. Initially the market is in equilibrium, Then the number of bagels produced is cut from 20 to 10 an hour and the price rises to $2.00 per bagel. Consumer surplus decreases by

-The figure above shows the market for hot dogs. a) What is the maximum price consumers are willing to pay for the 25th hot dog? b) What is the efficient quantity? c) Suppose that the production was limited to 25 hot dogs. In the figure, indicate the amount of the deadweight loss.

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

Jenn is willing to pay $75 for a purse and the purse's price is $60. What is Jenn's consumer surplus?

Producer surplus is the price of a good minus the opportunity cost of producing it, summed over the quantity produced.

The value of a good is equal to the

A market demand curve measures

-In the above figure, if the market price is $100 per ton, then the firm's producer surplus on the second ton of wheat is

The symmetry principle is the requirement that

-In the figure above, for each CD, the price a consumer is willing to pay is equal to the

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 figure above shows the market for coffee. If one firm owns all the coffee outlets and sells 10 million pounds of coffee a month, the deadweight loss is

-In the above figure, if the production of gloves was restricted to 2,000 a day, then the deadweight loss would equal

If the government restricts the selling of corn so that the quantity is less than the equilibrium quantity, then the policy I. creates a deadweight loss. II) decreases total surplus.

-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. The total deadweight loss would be

-The figure above shows Clara's demand for CDs. At a price of $5 for a CD, the value of Clara's total consumer surplus for all the CDs she buys is

-In the above figure, what is the total consumer surplus from all the milk bought if the price of milk is $3.00 per gallon?

-In the above figure, when the quantity equals 400 pretzels

-The figure illustrates the market for bagels. Initially the market is in equilibrium, Then the number of bagels produced is cut from 20 to 10 an hour and the price rises to $2.00 per bagel. Consumer surplus decreases by

-The figure above shows the market for hot dogs. a) What is the maximum price consumers are willing to pay for the 25th hot dog? b) What is the efficient quantity? c) Suppose that the production was limited to 25 hot dogs. In the figure, indicate the amount of the deadweight loss.

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

Jenn is willing to pay $75 for a purse and the purse's price is $60. What is Jenn's consumer surplus?

Producer surplus is the price of a good minus the opportunity cost of producing it, summed over the quantity produced.

The value of a good is equal to the

A market demand curve measures

-In the above figure, if the market price is $100 per ton, then the firm's producer surplus on the second ton of wheat is

The symmetry principle is the requirement that

-In the figure above, for each CD, the price a consumer is willing to pay is equal to the

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