Exam 5: Efficiency and Equity

Which of the following can prevent markets from reaching efficiency? I. price regulations that cap the price that may be charged II) increasing marginal cost III) monopoly

Using the "It's not fair if the result isn't fair" principle of fairness, an income tax designed to transfer wealth from the rich to the poor

Currently kidneys are allocated based on the needs of each perspective recipient, their blood type, and the urgency of their case. An alternative way to allocate kidneys is to go by the order in which patients were placed on the waiting list. In that case, the allocation of resources is made using

Bill Gates is a founder of Microsoft and the world's richest individual. Suppose Microsoft sells more software and Mr. Gates acquires another billion dollars in wealth. Simultaneously, suppose a burglar whose income is well below average broke into Bill Gates' house and stole a million dollars' worth of antiques. Using the "it's not fair if the rules aren't fair" approach to fairness, is Mr. Gates' acquisition of additional wealth fair? Is the (poor) thief's acquisition fair?

-In the above figure, what is the amount of producer surplus at the efficient quantity?

Among the sources of economic inefficiency are all of the following EXCEPT

-In the figure above, what is the marginal social benefit of the 3,000,000th CD per month?

-The figure above shows the market for milk. If the efficient quantity of milk is produced, the producer surplus is

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 the market producer surplus?

-The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. Producing and consuming the efficient quantity of coffee in Kaffenia means that

The market demand curve

According to Utilitarian principles first discussed in the nineteenth century, fairness implies

According to John Rawls, the fair distribution of income is the one that

-The above figure shows the competitive market for turkey. The producer surplus for the 300 millionth pound of turkey is

-The figure above shows Cindy's demand for CDs per year. a) What is Cindy's total consumer surplus if the price of a CD is $12? b) What is Cindy's total consumer surplus if the price of a CD is $9? c) What happens to Cindy's consumer surplus when the price of a CD falls?

If the marginal social cost of a television exceeds the marginal social benefit of a television, it would increase society's total surplus to decrease production of televisions.

The market demand curve is constructed by adding the

The market demand curve also is

-The figure above shows the demand curve for DVDs. Use it to illustrate the consumer surplus if the price of a DVD is $15.

Marginal benefit is the benefit received from