Question 1

Which of the following conditions could lead to an inefficient quantity of pretzels being produced?

Accepted Answer

A)  the existence of many producers of pretzels 
B)  the existence of many consumers of pretzels 
C)  the existence of a single producer and seller of pretzels 
D)  All of the above conditions could cause the actual quantity of pretzels to be an inefficient quantity. 
A)  the existence of many producers of pretzels 
B)  the existence of many consumers of pretzels 
C)  the existence of a single producer and seller of pretzels 
D)  All of the above conditions could cause the actual quantity of pretzels to be an inefficient quantity.

Question 2

-The figure illustrates the market for haircuts. Curve A is the ________ curve, and curve B is the ________ curve.

Accepted Answer

A)  marginal social cost; marginal social benefit 
B)  total social cost; total social benefit 
C)  opportunity cost; opportunity benefit 
D)  marginal social benefit; marginal social cost 
A)  marginal social cost; marginal social benefit 
B)  total social cost; total social benefit 
C)  opportunity cost; opportunity benefit 
D)  marginal social benefit; marginal social cost

Question 3

The producer surplus on a unit of a good is the

Accepted Answer

A)  difference between the marginal social benefit and the marginal social cost. 
B)  number of dollars' worth of other goods and services forgone to produce this unit of the good. 
C)  difference between the price of the good and the marginal cost of producing the good. 
D)  difference between the total cost of the good and the marginal cost. 
A)  difference between the marginal social benefit and the marginal social cost. 
B)  number of dollars' worth of other goods and services forgone to produce this unit of the good. 
C)  difference between the price of the good and the marginal cost of producing the good. 
D)  difference between the total cost of the good and the marginal cost.

Question 4

-The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. What is the efficient quantity of coffee to produce each day?

Accepted Answer

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

Question 5

-The figure above shows the market for milk. If one firm owns all the milk outlets in the city and sells 100 gallons of milk

Accepted Answer

A)  the deadweight loss is $100. 
B)  the deadweight loss is $75. 
C)  the deadweight loss is $50. 
D)  there is no deadweight loss. 
A)  the deadweight loss is $100. 
B)  the deadweight loss is $75. 
C)  the deadweight loss is $50. 
D)  there is no deadweight loss.

Question 6

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, what is the marginal social cost when the market quantity supplied is 750 slices of pizza per month?

Accepted Answer

A)  $3 
B)  $7 
C)  $9 
D)  $3.50 
A)  $3 
B)  $7 
C)  $9 
D)  $3.50

Question 7

Which of these is NOT a potential source of inefficiency?

Accepted Answer

A)  external benefits 
B)  increasing marginal costs 
C)  monopoly 
D)  subsidies 
A)  external benefits 
B)  increasing marginal costs 
C)  monopoly 
D)  subsidies

Question 8

As a method of resource allocation, market price

Accepted Answer

A)  means those who are willing and able to pay get a particular good or service. 
B)  works well when self-interest must be suppressed. 
C)  works best inside firms and government departments. 
D)  is efficient when there is no effective way to distinguish among potential users of a scarce resource. 
A)  means those who are willing and able to pay get a particular good or service. 
B)  works well when self-interest must be suppressed. 
C)  works best inside firms and government departments. 
D)  is efficient when there is no effective way to distinguish among potential users of a scarce resource.

Question 9

Which of the following is TRUE?

Accepted Answer

A)  When resources are allocated on the basis of personal characteristics, all people who are willing and able to pay the price get the resource. 
B)  When the range of activities to be monitored is large and complex, a command system allocates resources better than a market price. 
C)  When a market price allocates resources, some people who are willing and able to pay that price don't get the resource. 
D)  Force helps support the legal system on which markets function. 
A)  When resources are allocated on the basis of personal characteristics, all people who are willing and able to pay the price get the resource. 
B)  When the range of activities to be monitored is large and complex, a command system allocates resources better than a market price. 
C)  When a market price allocates resources, some people who are willing and able to pay that price don't get the resource. 
D)  Force helps support the legal system on which markets function.

Question 10

Suppose the marginal cost of producing a good falls so that the marginal social cost curve shifts downward. Then the efficient quantity to produce of that product

Accepted Answer

A)  increases. 
B)  does not change. 
C)  decreases. 
D)  could increase, stay the same, or decrease. 
A)  increases. 
B)  does not change. 
C)  decreases. 
D)  could increase, stay the same, or decrease.

Question 11

-In the figure above, if the quantity is restricted to 2, then the deadweight loss in this market equals

Accepted Answer

A)  b + g. 
B)  c + d. 
C)  e + k. 
D)  h + i. 
A)  b + g. 
B)  c + d. 
C)  e + k. 
D)  h + i.

Question 12

Joe is willing to pay $4 for his first slice of pizza and $3 for his second slice of pizza. If the price is $2, on his two slices of pizza Joe receives a total consumer surplus of

Accepted Answer

A)  $4. 
B)  $3. 
C)  $2. 
D)  $1. 
A)  $4. 
B)  $3. 
C)  $2. 
D)  $1.

Question 13

-In the above figure, the individual's consumer surplus will be highest if

Accepted Answer

A)  the price of ice cream is $5 per gallon. 
B)  the price of ice cream is $3 per gallon. 
C)  the price of ice cream is $2 per gallon. 
D)  ice cream is free. 
A)  the price of ice cream is $5 per gallon. 
B)  the price of ice cream is $3 per gallon. 
C)  the price of ice cream is $2 per gallon. 
D)  ice cream is free.

Question 14

Producer surplus is the

Accepted Answer

A)  cost of the good summed over the quantity sold. 
B)  demand for a good minus the supply summed over the quantity sold. 
C)  price of a good minus the marginal cost of producing it summed over the quantity sold. 
D)  marginal cost of producing it summed over the quantity sold. 
A)  cost of the good summed over the quantity sold. 
B)  demand for a good minus the supply summed over the quantity sold. 
C)  price of a good minus the marginal cost of producing it summed over the quantity sold. 
D)  marginal cost of producing it summed over the quantity sold.

Question 15

Producer surplus is the difference between the

Accepted Answer

A)  price and the willingness to pay for the good. 
B)  price and the marginal cost of producing the good summed over the quantity sold. 
C)  willingness to pay for the good and the marginal cost of producing the good summed over the quantity sold. 
D)  marginal benefit of consuming the good and the marginal cost of producing the good summed over the quantity sold. 
A)  price and the willingness to pay for the good. 
B)  price and the marginal cost of producing the good summed over the quantity sold. 
C)  willingness to pay for the good and the marginal cost of producing the good summed over the quantity sold. 
D)  marginal benefit of consuming the good and the marginal cost of producing the good summed over the quantity sold.

Question 16

-The figure above shows Clara's demand for CDs. At a price of $20 for a CD, the value of Clara's total consumer surplus for all the CDs she buys is

Accepted Answer

A)  $40. 
B)  $30. 
C)  $20. 
D)  $4. 
A)  $40. 
B)  $30. 
C)  $20. 
D)  $4.

Question 17

If the demand for a good does NOT change, how will an increase in the price of that good affect the consumer surplus from it?

Accepted Answer

The consumer surplus equals the differen

Question 18

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

Accepted Answer

A)  consumer surplus on the last pound of turkey consumed is equal to zero. 
B)  total consumer surplus from turkey consumption is $400 million. 
C)  deadweight loss from turkey consumption is equal to zero. 
D)  All of the above answers are correct. 
A)  consumer surplus on the last pound of turkey consumed is equal to zero. 
B)  total consumer surplus from turkey consumption is $400 million. 
C)  deadweight loss from turkey consumption is equal to zero. 
D)  All of the above answers are correct.

Question 19

-The schedules in the table give the marginal social benefit and marginal social cost of a DVD. If the marginal cost of producing a DVD increases by $4, then the efficient number of DVDs is ________ a week.

Accepted Answer

A)  1 
B)  2 
C)  5 
D)  4 
A)  1 
B)  2 
C)  5 
D)  4

Question 20

-In the table above, the deadweight loss is zero when ________ umbrellas are produced and sold.

Accepted Answer

A)  20 
B)  40 
C)  60 
D)  80 
A)  20 
B)  40 
C)  60 
D)  80

Which of the following conditions could lead to an inefficient quantity of pretzels being produced?

-The figure illustrates the market for haircuts. Curve A is the curve, and curve B is the curve.

The producer surplus on a unit of a good is the

-The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. What is the efficient quantity of coffee to produce each day?

-The figure above shows the market for milk. If one firm owns all the milk outlets in the city and sells 100 gallons of milk

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, what is the marginal social cost when the market quantity supplied is 750 slices of pizza per month?

Which of these is NOT a potential source of inefficiency?

As a method of resource allocation, market price

Which of the following is TRUE?

Suppose the marginal cost of producing a good falls so that the marginal social cost curve shifts downward. Then the efficient quantity to produce of that product

-In the figure above, if the quantity is restricted to 2, then the deadweight loss in this market equals

Joe is willing to pay $4 for his first slice of pizza and $3 for his second slice of pizza. If the price is $2, on his two slices of pizza Joe receives a total consumer surplus of

-In the above figure, the individual's consumer surplus will be highest if

Producer surplus is the

Producer surplus is the difference between the

-The figure above shows Clara's demand for CDs. At a price of $20 for a CD, the value of Clara's total consumer surplus for all the CDs she buys is

If the demand for a good does NOT change, how will an increase in the price of that good affect the consumer surplus from it?

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

-The schedules in the table give the marginal social benefit and marginal social cost of a DVD. If the marginal cost of producing a DVD increases by $4, then the efficient number of DVDs is ________ a week.

-In the table above, the deadweight loss is zero when ________ umbrellas are produced and sold.

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

Which of the following conditions could lead to an inefficient quantity of pretzels being produced?

-The figure illustrates the market for haircuts. Curve A is the ________ curve, and curve B is the ________ curve.

The producer surplus on a unit of a good is the

-The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. What is the efficient quantity of coffee to produce each day?

-The figure above shows the market for milk. If one firm owns all the milk outlets in the city and sells 100 gallons of milk

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, what is the marginal social cost when the market quantity supplied is 750 slices of pizza per month?

Which of these is NOT a potential source of inefficiency?

As a method of resource allocation, market price

Which of the following is TRUE?

Suppose the marginal cost of producing a good falls so that the marginal social cost curve shifts downward. Then the efficient quantity to produce of that product

-In the figure above, if the quantity is restricted to 2, then the deadweight loss in this market equals

Joe is willing to pay $4 for his first slice of pizza and $3 for his second slice of pizza. If the price is $2, on his two slices of pizza Joe receives a total consumer surplus of

-In the above figure, the individual's consumer surplus will be highest if

Producer surplus is the

Producer surplus is the difference between the

-The figure above shows Clara's demand for CDs. At a price of $20 for a CD, the value of Clara's total consumer surplus for all the CDs she buys is

If the demand for a good does NOT change, how will an increase in the price of that good affect the consumer surplus from it?

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

-The schedules in the table give the marginal social benefit and marginal social cost of a DVD. If the marginal cost of producing a DVD increases by $4, then the efficient number of DVDs is ________ a week.

-In the table above, the deadweight loss is zero when ________ umbrellas are produced and sold.

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 illustrates the market for haircuts. Curve A is the curve, and curve B is the curve.