Question 1

When the amount of output is such that marginal social benefit exceeds marginal social cost, then to reach the efficient quantity

Accepted Answer

A)  production should be increased. 
B)  production should be decreased. 
C)  production should remain constant. 
D)  More information is needed to determine if production should be increased, decreased, or not changed. 
A)  production should be increased. 
B)  production should be decreased. 
C)  production should remain constant. 
D)  More information is needed to determine if production should be increased, decreased, or not changed.

Question 2

At the current level of output, the marginal social cost of sandwiches exceeds the marginal social benefit of sandwiches. Compared to the allocatively efficient quantity we are producing too ________ sandwiches and too ________ of other goods.

Accepted Answer

A)  many; little 
B)  many; much 
C)  few; little 
D)  few; much 
A)  many; little 
B)  many; much 
C)  few; little 
D)  few; much

Question 3

Suppose there are four firms that are each willing to sell one unit of a good. Each firm has a different minimum price that they are willing to sell for: Firm A $6, Firm B $7, Firm C $10, and Firm D $12. If the market price is $11 then the market supply for this good will be

Accepted Answer

A)  3 units. 
B)  4 units. 
C)  1 unit. 
D)  2 units. 
A)  3 units. 
B)  4 units. 
C)  1 unit. 
D)  2 units.

Question 4

The market supply curve is also the

Accepted Answer

A)  marginal social cost curve. 
B)  marginal value curve. 
C)  marginal social benefit curve. 
D)  maximum-supply-price curve. 
A)  marginal social cost curve. 
B)  marginal value curve. 
C)  marginal social benefit curve. 
D)  maximum-supply-price curve.

Question 5

-What is the efficient quantity of snowboards in the above figure?

Accepted Answer

A)  0 
B)  100 
C)  200 
D)  500 
A)  0 
B)  100 
C)  200 
D)  500

Question 6

"If the marginal social benefit of a car exceeds the marginal social cost of a car, we are producing too many cars." True or false? Explain.

Accepted Answer

A) True 
 B)False

Question 7

-The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. Which of the following would lead the quantity of doughnuts in Kaffenia to differ from the efficient quantity?

Accepted Answer

A)  The existence of many producers and sellers of doughnuts. 
B)  The existence of just one producer and seller of doughnuts. 
C)  Damage to the environment from the disposal of oil used to cook the doughnuts. 
D)  Both answers B and C are correct. 
A)  The existence of many producers and sellers of doughnuts. 
B)  The existence of just one producer and seller of doughnuts. 
C)  Damage to the environment from the disposal of oil used to cook the doughnuts. 
D)  Both answers B and C are correct.

Question 8

-In the above figure, if output were restricted to 300 million pounds of turkey, then

Accepted Answer

A)  the marginal social benefit would exceed the marginal social cost on the last pound of turkey traded by $0.80. 
B)  there would be a deadweight loss of $40 million. 
C)  there would be inefficient underproduction of turkey. 
D)  All of the above answers are correct. 
A)  the marginal social benefit would exceed the marginal social cost on the last pound of turkey traded by $0.80. 
B)  there would be a deadweight loss of $40 million. 
C)  there would be inefficient underproduction of turkey. 
D)  All of the above answers are correct.

Question 9

-The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon and Dana is allowed to buy only 8 gallons of ice cream, then her consumer surplus on the 8th gallon is

Accepted Answer

A)  $1. 
B)  $2. 
C)  $3. 
D)  $8. 
A)  $1. 
B)  $2. 
C)  $3. 
D)  $8.

Question 10

-The figure above shows the market for coffee. Coffee is a normal good. If consumers' incomes fall, the efficient quantity of coffee will ________ and the producer surplus will ________.

Accepted Answer

A)  increase; increase 
B)  increase; decrease 
C)  decrease; decrease 
D)  decrease; increase 
A)  increase; increase 
B)  increase; decrease 
C)  decrease; decrease 
D)  decrease; increase

Question 11

-In the above figure, at the efficient quantity of CDs

Accepted Answer

A)  total consumer surplus is zero. 
B)  total producer surplus is zero. 
C)  the sum of consumer surplus and producer surplus is maximized. 
D)  Both answers A and B are correct. 
A)  total consumer surplus is zero. 
B)  total producer surplus is zero. 
C)  the sum of consumer surplus and producer surplus is maximized. 
D)  Both answers A and B are correct.

Question 12

If the marginal cost of producing hair styling decreases, then the efficient quantity of hair stylings to produce

Accepted Answer

A)  depends on the marginal benefit. 
B)  remains the same. 
C)  decreases. 
D)  increases. 
A)  depends on the marginal benefit. 
B)  remains the same. 
C)  decreases. 
D)  increases.

Question 13

-The figure illustrates the market for bagels. If the number of bagels is increased from 20 to 30 an hour, consumer surplus plus producer surplus ________ and deadweight loss is ________.

Accepted Answer

A)  decreases; negative 
B)  decreases; positive 
C)  increases; positive 
D)  increases; negative 
A)  decreases; negative 
B)  decreases; positive 
C)  increases; positive 
D)  increases; negative

Question 14

If the marginal social benefit of ice cream curve shifts rightward because people now like ice cream better than before, the marginal social cost curve of ice cream will shift leftward.

Accepted Answer

A) True 
 B)False

Question 15

If the marginal social cost exceeds the marginal social benefit for the last pair of shoes produced, then the economy is producing more than the efficient amount.

Accepted Answer

A) True 
 B)False

Question 16

-The schedules in the table give the marginal social benefit and marginal social cost of a DVD. If there are no external benefits or external costs, the efficient number of DVDs to produce is ________ a week.

Accepted Answer

A)  1 
B)  3 
C)  5 
D)  any number less than 3 
A)  1 
B)  3 
C)  5 
D)  any number less than 3

Question 17

-The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. There is no external benefit. What is the marginal benefit to the citizen of Kaffenia who consumes the four hundredth pound of coffee each day?

Accepted Answer

A)  $1.00 per pound 
B)  $2.00 per pound 
C)  $3.00 per pound 
D)  $4.00 per pound 
A)  $1.00 per pound 
B)  $2.00 per pound 
C)  $3.00 per pound 
D)  $4.00 per pound

Question 18

The cost of producing one more pizza is the

Accepted Answer

A)  price. 
B)  marginal benefit. 
C)  marginal cost. 
D)  producer surplus. 
A)  price. 
B)  marginal benefit. 
C)  marginal cost. 
D)  producer surplus.

Question 19

When the Smiths were shopping for their present home, the asking price from the previous owner was $250,000.00. The Smiths had decided they would pay no more than $245,000.00 for the house. After negotiations, the Smiths actually purchased the house for $239,000.00. They, therefore, enjoyed a consumer surplus of

Accepted Answer

A)  $239,000.00. 
B)  $5,000.00. 
C)  $6,000.00. 
D)  $11,000.00. 
A)  $239,000.00. 
B)  $5,000.00. 
C)  $6,000.00. 
D)  $11,000.00.

Question 20

-The figure above shows the market for umbrellas in Sunville. When the market for umbrellas in Sunville is in equilibrium, what is the total deadweight loss?

Accepted Answer

A)  $2,000 
B)  $800 
C)  $0 
D)  600 umbrellas 
A)  $2,000 
B)  $800 
C)  $0 
D)  600 umbrellas

When the amount of output is such that marginal social benefit exceeds marginal social cost, then to reach the efficient quantity

At the current level of output, the marginal social cost of sandwiches exceeds the marginal social benefit of sandwiches. Compared to the allocatively efficient quantity we are producing too sandwiches and too of other goods.

Suppose there are four firms that are each willing to sell one unit of a good. Each firm has a different minimum price that they are willing to sell for: Firm A $6, Firm B $7, Firm C $10, and Firm D $12. If the market price is $11 then the market supply for this good will be

The market supply curve is also the

-What is the efficient quantity of snowboards in the above figure?

"If the marginal social benefit of a car exceeds the marginal social cost of a car, we are producing too many cars." True or false? Explain.

-The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. Which of the following would lead the quantity of doughnuts in Kaffenia to differ from the efficient quantity?

-In the above figure, if output were restricted to 300 million pounds of turkey, then

-The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon and Dana is allowed to buy only 8 gallons of ice cream, then her consumer surplus on the 8th gallon is

-The figure above shows the market for coffee. Coffee is a normal good. If consumers' incomes fall, the efficient quantity of coffee will and the producer surplus will .

-In the above figure, at the efficient quantity of CDs

If the marginal cost of producing hair styling decreases, then the efficient quantity of hair stylings to produce

-The figure illustrates the market for bagels. If the number of bagels is increased from 20 to 30 an hour, consumer surplus plus producer surplus and deadweight loss is .

If the marginal social benefit of ice cream curve shifts rightward because people now like ice cream better than before, the marginal social cost curve of ice cream will shift leftward.

If the marginal social cost exceeds the marginal social benefit for the last pair of shoes produced, then the economy is producing more than the efficient amount.

-The schedules in the table give the marginal social benefit and marginal social cost of a DVD. If there are no external benefits or external costs, the efficient number of DVDs to produce is ________ a week.

-The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. There is no external benefit. What is the marginal benefit to the citizen of Kaffenia who consumes the four hundredth pound of coffee each day?

The cost of producing one more pizza is the

-The figure above shows the market for umbrellas in Sunville. When the market for umbrellas in Sunville is in equilibrium, what is the total deadweight loss?

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

When the amount of output is such that marginal social benefit exceeds marginal social cost, then to reach the efficient quantity

At the current level of output, the marginal social cost of sandwiches exceeds the marginal social benefit of sandwiches. Compared to the allocatively efficient quantity we are producing too ________ sandwiches and too ________ of other goods.

Suppose there are four firms that are each willing to sell one unit of a good. Each firm has a different minimum price that they are willing to sell for: Firm A $6, Firm B $7, Firm C $10, and Firm D $12. If the market price is $11 then the market supply for this good will be

The market supply curve is also the

-What is the efficient quantity of snowboards in the above figure?

"If the marginal social benefit of a car exceeds the marginal social cost of a car, we are producing too many cars." True or false? Explain.

-The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. Which of the following would lead the quantity of doughnuts in Kaffenia to differ from the efficient quantity?

-In the above figure, if output were restricted to 300 million pounds of turkey, then

-The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon and Dana is allowed to buy only 8 gallons of ice cream, then her consumer surplus on the 8th gallon is

-The figure above shows the market for coffee. Coffee is a normal good. If consumers' incomes fall, the efficient quantity of coffee will ________ and the producer surplus will ________.

-In the above figure, at the efficient quantity of CDs

If the marginal cost of producing hair styling decreases, then the efficient quantity of hair stylings to produce

-The figure illustrates the market for bagels. If the number of bagels is increased from 20 to 30 an hour, consumer surplus plus producer surplus ________ and deadweight loss is ________.

If the marginal social benefit of ice cream curve shifts rightward because people now like ice cream better than before, the marginal social cost curve of ice cream will shift leftward.

If the marginal social cost exceeds the marginal social benefit for the last pair of shoes produced, then the economy is producing more than the efficient amount.

-The schedules in the table give the marginal social benefit and marginal social cost of a DVD. If there are no external benefits or external costs, the efficient number of DVDs to produce is ________ a week.

-The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. There is no external benefit. What is the marginal benefit to the citizen of Kaffenia who consumes the four hundredth pound of coffee each day?

The cost of producing one more pizza is the

-The figure above shows the market for umbrellas in Sunville. When the market for umbrellas in Sunville is in equilibrium, what is the total deadweight loss?

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

At the current level of output, the marginal social cost of sandwiches exceeds the marginal social benefit of sandwiches. Compared to the allocatively efficient quantity we are producing too sandwiches and too of other goods.

-The figure above shows the market for coffee. Coffee is a normal good. If consumers' incomes fall, the efficient quantity of coffee will and the producer surplus will .

-The figure illustrates the market for bagels. If the number of bagels is increased from 20 to 30 an hour, consumer surplus plus producer surplus and deadweight loss is .