Question 1

Why do societies face a tradeoff between the size of the economic pie and the degree of equality with which it is shared?

Accepted Answer

A person's share of the economic pie is

Question 2

-In the above table, when 200 brownies are produced

Accepted Answer

A)  marginal social benefit is greater than marginal social cost, and resource use is efficient. 
B)  marginal social benefit is greater than marginal social cost, and there is a deadweight loss. 
C)  marginal social benefit equals marginal social cost, and resource use is efficient. 
D)  marginal social benefit is less than marginal social cost, and there is a deadweight loss. 
A)  marginal social benefit is greater than marginal social cost, and resource use is efficient. 
B)  marginal social benefit is greater than marginal social cost, and there is a deadweight loss. 
C)  marginal social benefit equals marginal social cost, and resource use is efficient. 
D)  marginal social benefit is less than marginal social cost, and there is a deadweight loss.

Question 3

-The figure above shows the market for milk. When the efficient quantity of milk is produced, the marginal social benefit from the last gallon is

Accepted Answer

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

Question 4

What is the marginal cost of a good?

Accepted Answer

The marginal cost of a good is the oppor

Question 5

Deadweight loss can be the result of

Accepted Answer

A)  overproduction, but not underproduction. 
B)  underproduction, but not overproduction. 
C)  both overproduction and underproduction. 
D)  neither overproduction, nor underproduction. 
A)  overproduction, but not underproduction. 
B)  underproduction, but not overproduction. 
C)  both overproduction and underproduction. 
D)  neither overproduction, nor underproduction.

Question 6

Alvin Roth of Harvard won the 2012 Nobel Prize in Economics for designing systems that allocate resources in innovative ways. For example, he designed a system that matches donated kidneys to recipients waiting for such donations. This system takes into account the needs of each perspective recipient, their blood type, and the urgency of their case. This allocation of resources is made using

Accepted Answer

A)  market price. 
B)  auction. 
C)  lottery. 
D)  personal characteristics. 
A)  market price. 
B)  auction. 
C)  lottery. 
D)  personal characteristics.

Question 7

-The figure illustrates the market for hot dogs on Big Foot Island. The producer surplus is

Accepted Answer

A)  $240 an hour. 
B)  $180 an hour. 
C)  $1.20 a hot dog. 
D)  $60 an hour. 
A)  $240 an hour. 
B)  $180 an hour. 
C)  $1.20 a hot dog. 
D)  $60 an hour.

Question 8

Why does the problem of the big tradeoff arise when the government engages in the process of redistributing income using taxes and transfers?

Accepted Answer

There are two reasons why the big tradeo

Question 9

The producer surplus on a unit of output is the difference between the market price and the opportunity cost of producing it.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A)  $1.00. 
B)  $2.50. 
C)  $3.00. 
D)  $4.00. 
A)  $1.00. 
B)  $2.50. 
C)  $3.00. 
D)  $4.00.

Question 11

If the market for diamonds is a monopoly, then

Accepted Answer

A)  there is an inefficient amount of resources allocated to the diamond market. 
B)  the prices of diamonds are too low. 
C)  diamond production is at the amount where the marginal social benefit equals the marginal social cost. 
D)  the diamond market is efficient. 
A)  there is an inefficient amount of resources allocated to the diamond market. 
B)  the prices of diamonds are too low. 
C)  diamond production is at the amount where the marginal social benefit equals the marginal social cost. 
D)  the diamond market is efficient.

Question 12

-The figure above shows the market for umbrellas in Sunville. Suppose the quantity of umbrellas currently traded in Sunville is 199 per day. If one more umbrella is sold, the total surplus in Sunville will

Accepted Answer

A)  decrease by $26.67. 
B)  increase by $26.67. 
C)  increase by $50.00. 
D)  not change. 
A)  decrease by $26.67. 
B)  increase by $26.67. 
C)  increase by $50.00. 
D)  not change.

Question 13

If the government subsidizes the production of a good

Accepted Answer

A)  an efficient outcome for producers occurs. 
B)  overproduction relative to the efficient quantity occurs. 
C)  a deadweight loss is created. 
D)  Both answers B and C are correct. 
A)  an efficient outcome for producers occurs. 
B)  overproduction relative to the efficient quantity occurs. 
C)  a deadweight loss is created. 
D)  Both answers B and C are correct.

Question 14

The figure shows the competitive market for milk.
-In the figure above, when the quantity of milk produced is 600 gallons per day, what is the deadweight loss?

Accepted Answer

A)  $250 
B)  $125 
C)  $500 
D)  $50 
A)  $250 
B)  $125 
C)  $500 
D)  $50

Question 15

-The figure above shows Clara's demand for CDs. If the price of a CD were to increase from $15 to $25, Clara's total consumer surplus for all the CDs she buys would

Accepted Answer

A)  decrease by $40. 
B)  remain unchanged. 
C)  decrease by $90. 
D)  increase by $80. 
A)  decrease by $40. 
B)  remain unchanged. 
C)  decrease by $90. 
D)  increase by $80.

Question 16

-The above figure shows that the maximum amount a person is willing to pay for the 400th pretzel

Accepted Answer

A)  is greater than the marginal social cost of the 400th pretzel. 
B)  is less than the marginal social benefit of the 400th pretzel. 
C)  and the marginal social benefit of the 400th pretzel are both $2. 
D)  is greater than the marginal social benefit of the 200th pretzel. 
A)  is greater than the marginal social cost of the 400th pretzel. 
B)  is less than the marginal social benefit of the 400th pretzel. 
C)  and the marginal social benefit of the 400th pretzel are both $2. 
D)  is greater than the marginal social benefit of the 200th pretzel.

Question 17

-Homer, Bart, and Lisa are the only consumers in the market. Using the information in the above table, what is the market demand for chocolate chip cookies at $4.00 per pound?

Accepted Answer

A)  21 pounds 
B)  17 pounds 
C)  11 pounds 
D)  4 pounds 
A)  21 pounds 
B)  17 pounds 
C)  11 pounds 
D)  4 pounds

Question 18

At the current quantity of table saws, the marginal social cost is more than the marginal social benefit. Then

Accepted Answer

A)  production of table saws should be decreased to reach the efficient level. 
B)  production of table saws should be increased to reach the efficient level. 
C)  production of table saws is currently at the efficient level. 
D)  producer surplus will be larger than consumer surplus. 
A)  production of table saws should be decreased to reach the efficient level. 
B)  production of table saws should be increased to reach the efficient level. 
C)  production of table saws is currently at the efficient level. 
D)  producer surplus will be larger than consumer surplus.

Question 19

If you increase your consumption of soda by one additional can a week, your marginal benefit of this last can is $1.00. The ________ of this last can of soda is $1.00.

Accepted Answer

A)  value 
B)  price 
C)  opportunity cost 
D)  marginal cost 
A)  value 
B)  price 
C)  opportunity cost 
D)  marginal cost

Question 20

The annual Great Sofa Round-up is a collaborative event between Colorado State University and the City of Fort Collins aims to help students and neighbors get rid of unwanted furniture, while giving people in need access to inexpensive sofas. Suppose on the day of the Round-up, your friends take their couches to the main parking lot on campus where the Round-up is held. Raj will not sell his couch for less than $30, Emily will not sell her couch for less than $50, Nara will not sell her couch for less than $20, Sergio just wants to get rid of his couch and he is willing to give it away for free. At the Round-up, potential buyers think that all the couches available are basically the same and they are willing to buy a couch for $50. What is the value of Nara's producer surplus?

Accepted Answer

A)  $30 
B)  $50 
C)  $20 
D)  $10 
A)  $30 
B)  $50 
C)  $20 
D)  $10

Why do societies face a tradeoff between the size of the economic pie and the degree of equality with which it is shared?

-In the above table, when 200 brownies are produced

-The figure above shows the market for milk. When the efficient quantity of milk is produced, the marginal social benefit from the last gallon is

What is the marginal cost of a good?

Deadweight loss can be the result of

-The figure illustrates the market for hot dogs on Big Foot Island. The producer surplus is

Why does the problem of the big tradeoff arise when the government engages in the process of redistributing income using taxes and transfers?

The producer surplus on a unit of output is the difference between the market price and the opportunity cost of producing it.

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

If the market for diamonds is a monopoly, then

-The figure above shows the market for umbrellas in Sunville. Suppose the quantity of umbrellas currently traded in Sunville is 199 per day. If one more umbrella is sold, the total surplus in Sunville will

If the government subsidizes the production of a good

The figure shows the competitive market for milk. -In the figure above, when the quantity of milk produced is 600 gallons per day, what is the deadweight loss?

-The figure above shows Clara's demand for CDs. If the price of a CD were to increase from $15 to $25, Clara's total consumer surplus for all the CDs she buys would

-The above figure shows that the maximum amount a person is willing to pay for the 400th pretzel

-Homer, Bart, and Lisa are the only consumers in the market. Using the information in the above table, what is the market demand for chocolate chip cookies at $4.00 per pound?

At the current quantity of table saws, the marginal social cost is more than the marginal social benefit. Then

If you increase your consumption of soda by one additional can a week, your marginal benefit of this last can is $1.00. The ________ of this last can of soda is $1.00.

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

Why do societies face a tradeoff between the size of the economic pie and the degree of equality with which it is shared?

-In the above table, when 200 brownies are produced

-The figure above shows the market for milk. When the efficient quantity of milk is produced, the marginal social benefit from the last gallon is

What is the marginal cost of a good?

Deadweight loss can be the result of

-The figure illustrates the market for hot dogs on Big Foot Island. The producer surplus is

Why does the problem of the big tradeoff arise when the government engages in the process of redistributing income using taxes and transfers?

The producer surplus on a unit of output is the difference between the market price and the opportunity cost of producing it.

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

If the market for diamonds is a monopoly, then

-The figure above shows the market for umbrellas in Sunville. Suppose the quantity of umbrellas currently traded in Sunville is 199 per day. If one more umbrella is sold, the total surplus in Sunville will

If the government subsidizes the production of a good

The figure shows the competitive market for milk. -In the figure above, when the quantity of milk produced is 600 gallons per day, what is the deadweight loss?

-The figure above shows Clara's demand for CDs. If the price of a CD were to increase from $15 to $25, Clara's total consumer surplus for all the CDs she buys would

-The above figure shows that the maximum amount a person is willing to pay for the 400th pretzel

-Homer, Bart, and Lisa are the only consumers in the market. Using the information in the above table, what is the market demand for chocolate chip cookies at $4.00 per pound?

At the current quantity of table saws, the marginal social cost is more than the marginal social benefit. Then

If you increase your consumption of soda by one additional can a week, your marginal benefit of this last can is $1.00. The ________ of this last can of soda is $1.00.

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