Exam 5: Efficiency and Equity

-The figure above shows the market for milk. If the government pays the milk producers a subsidy and production increases to 300 gallons per day

-The above table gives the market demand and market supply schedules for soda. What is the maximum price consumers are willing to pay for the 400th can of soda?

Utilitarianism is a principle whose goal is

-In the above figure, if the market price rises from $100 to $125 per ton of wheat, then producer surplus

-The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. There is no external benefit. What is the marginal benefit to the citizen of Kaffenia who consumes the 100th dozen doughnuts each day?

Utilitarianism is based on the argument that

The marginal social benefit curve for a product can be the same as the good's

The marginal cost curve

Which of the following is TRUE?

It is efficient to produce an additional shirt if the

When allocating resources using market price

Currently tire producers must receive a price of $50 per tire to produce 5000 tires. If the supply curve of tires is upward sloping, then to produce one additional tire, tire producers will need to receive a price of

For many years short wave radios were a way of getting news from faraway places and in difficult conditions. But as new technologies have spread, the people listening to these devices has decreased. (Source: The Economist, July 7, 2012) As new technology creates substitutes for short-wave radios, the demand for short-wave radios ________ and the consumer surplus from short-wave radios ________.

A competitive market is always efficient.

If the quantity of corn is such that the marginal cost of corn is greater than the marginal benefit of corn, then I. there is a deadweight loss. II) more than the efficient quantity of corn is produced.

As long as production is such that marginal social benefit is greater than marginal social cost, an efficient outcome occurs.

Consumer surplus is the ________ summed over the quantity bought.

Explain the modified version of utilitarianism proposed in the book entitled "A Theory of Justice," by the philosopher John Rawls and its relationship to the "big tradeoff."

The value of one more unit of a good or service is its marginal benefit.

-The figure above shows the market for umbrellas in Sunville. What is the marginal social benefit that Sunville consumers receive from the 200th umbrella bought?